BETHLEHEM, West Bank -- Bethlehem's first female mayor, Vera Baboun, can't walk through the main square of the biblical town without being stopped by admirers.
"This is our new mayor, who is turning Bethlehem into one of the greatest cities in the world," a tour guide hollered to a group of Christian tourists passing by the Church of the Nativity, built over the grotto where tradition says Jesus was born.
Starting with the town's high point of Christmas celebrations, Baboun is hoping to turn things around in the troubled city. For seven years, the Islamic Hamas militant group had a strong presence in Bethlehem's leadership, prompting a cutoff of international aid funds. But they lost their seats in October elections that brought in Baboun, who is Christian, as Bethlehem's mayors traditionally are.
The local economy is battered, with the highest unemployment in the West Bank, and local Christians continue to leave Bethlehem, which years ago moved from a Christian majority to a Muslim one. But Baboun is trying to raise hope, pointing to the Palestinans' recent boost of status at the United Nations.
"We still have a long way to go, but the Christmas season is special this year because not only do we celebrate the birth of Christ, but we are celebrating the birth of the Palestinian state," Baboun said, standing next to a 55-foot Christmas tree. "It is a Christmas of peace, of hope and love."
The United Nations General Assembly voted last month to upgrade the Palestinians' status to that of a nonmember observer state.
The move changed little on the ground, with Israel opposing the UN recognition bid and saying it bypassed peace negotiations aimed at establishing a state.
Bethlehem, like the rest of the West Bank, fell onto hard times after the violent Palestinian uprising against Israel broke out in late 2000, frightening tourists and pilgrims away. As the fighting has subsided in recent years, the tourists have returned in larger numbers. Last year's Christmas Eve celebration produced the highest turnout in more than a decade, with some 100,000 visitors, including foreigners and Arab Christians from Israel, reaching Bethlehem.
The Israeli Tourism Ministry said it expects 75,000 tourists to arrive for Christmas this year, citing last month's clash between Israel and Palestinian militants in Gaza as a reason for the drop. Bethlehem officials say all 34 hotels in the town are fully booked for the Christmas season, including 13 new ones built this year.
Baboun hopes to revitalize her town's depressed economy through tourism. She is also looking for a return of international aid to the town now that Hamas has dropped out of the municipal council.
Baboun says her status as the town's first female mayor can be a draw. "That people voted for me, even many men, is a sign Palestinians want change," she said.
Located on the southeastern outskirts of Jerusalem, Bethlehem is surrounded on three sides by a barrier Israel built to stop Palestinian militants after a wave of suicide bomb attacks in the last decade. Palestinians say the barrier has damaged their economy by restricting movement in and out of town.
"Our city is literally surrounded by settlements and walls," she said, pointing to the nearby barrier, where locals have painted a Christmas tree enclosed by gates. "It harms our growth, there's no exchange of people, ideas, goods." Despite the hardships, Baboun said she is hopeful before the holiday season, in large part due to the successful UN bid.
"This Christmas will be one of thanks, a message of peace for our statehood," she said, "but also a reminder that our fight is not over."