BETHLEHEM, West Bank – In the small town of Bethlehem, Christmas is barely a whisper this year.

Palestinian scouts marched through the streets, but without their traditional instruments such as drums, horns and bagpipes. There was no jubilant countdown to lighting the Christmas tree in the main square. In fact, there is no Christmas tree at all.

Bethlehem is facing its second bleak Christmas since the Gaza war broke out as faith leaders and residents grapple with how to mark the holiday as fellow Palestinians continue to be killed.

“Bethlehem is the capital of Christmas. It’s supposed to be the most wonderful time of the year. None of this is happening because we are grieving,” Rev. Munther Isaac, the pastor of Bethlehem Evangelical Lutheran Christmas Church, told NBC News.

Next to the altar where Isaac gives his sermons is an unusual nativity scene: for the second Christmas in a row, the baby Jesus is wrapped in a nativity scene keffiyehthe traditional Palestinian scarf, and lies on a pile of rubble. It serves as a reminder of the thousands of Palestinian children killed in Israeli attacks during the war, Isaac said. “We see Jesus in every child pulled from beneath the rubble in Gaza.”

Aside from the suffering in Gaza, Bethlehem faces its own challenges.

The economy relies heavily on tourism, but few foreign visitors come to the occupied West Bank city given the war sparked by Hamas’ attack on Israel on October 7, 2023. This exacerbates the economic misery that began with the Covid pandemic and also devastated the tourism industry.

“Honestly, it’s a desert,” said Rony Tabash, whose family has run a gift shop near the Church of the Nativity for nearly a century. “There are no pilgrims, there are no tourists.” At the worst times, he said he didn’t make a single sale for two months.

Meanwhile, an Israeli-built wall partially surrounds Bethlehem, cutting it off from Jerusalem and stifling housing and urban growth. Israel says the wall is a necessary security measure to stop suicide bombings. But in 2004, the International Court of Justice ruled that it was illegal under international law.

The hardship is causing many young people to leave Bethlehem and move abroad in search of a better future – raising fears that the Christian community in the city where the faith was born could dwindle and one day disappear.

“We are very, very concerned,” Isaac said. “This is beyond the point of danger.”

Life is not easier for older Christians. At 79-year-old Nuha Tarazi’s home, her landline phone beeps loudly as an attempted call to her relatives in Gaza fails again.

“That’s why I didn’t put up the Christmas tree,” said the widowed grandmother. “I wouldn’t feel comfortable doing that while they’re suffering there.”

Tarazi was born in Gaza City but has lived in Bethlehem for almost 40 years. When the war broke out, four of her siblings were still living in the Gaza Strip more than a year ago. But she said one of her sisters was killed in an Israeli attack and a brother died of untreated kidney disease as Gaza’s health system collapsed.

Her two surviving siblings – Sister Samhiaa Azzam and Brother Atallah Tarazi – are among hundreds of Christians seeking refuge at the Holy Family, a Catholic church in the ruins of Gaza City. Families fall asleep to the sound of nearby airstrikes and the constant whine of an Israeli drone overhead.

“We constantly ask God to protect us and keep us from all evil,” said Atallah, 77, a retired surgeon who once traveled the world but now rarely leaves the church grounds and sleeps in a cot in a crowded storage room .

During an NBC News visit to Gaza, Samhiaa and Atallah called their sister Nuha in Bethlehem. This time the call was connected.

“Happy New Year, may you be at peace,” Samhiaa, 74, she told her sister over the crackling line, urging her to celebrate Christmas despite everything. “My greetings to everyone, rejoice as much as you can. Rejoice.”