Excited tourists milled about the town's Manger Square, stopping in restaurants and souvenir shops and admiring a large, illuminated Christmas Tree. Marching bands and scout troops performed for the visitors in the streets, and on a stage next to the tree.
Will Green of New York City, along with his wife, Debbie, and their 2-year-old daughter Daphne were among the crowds of people who greeted Twal's motorcade as he entered town from nearby Jerusalem.
Green said that being in Bethlehem for Christmas was a dream come true. "All the stories that we grew up with. It's here. It's part of our life. We heard them in the family, school and church. This is the birthplace," he said.
Green slowly pushed a stroller and his wife held their daughter as they followed a crowd toward the Church of the Nativity, built on the site where Christians believe Jesus was born.
Palestinian dignitaries greeted Twal at the entrance of Bethlehem. His motorcade crawled through the town's narrow streets as he stopped to shake hands and greet the throngs of visitors. It took him nearly 90 minutes to make the short trip to the Church of the Nativity compound, where he celebrated Midnight Massachusetts.
Hundreds of people packed the compound for the service. Palestinian President Mahmoud Abbas, the European Union's foreign policy chief, Catherine Ashton, and Jordanian Foreign Minister Nasser Judeh were among the dignitaries in attendance.
In his homily, Twal addressed Abbas, telling the president he prays for a "just and equitable solution" for the Palestinians. Twal, himself a Palestinian, also expressed sympathy for the plight of the Palestinians, particularly families with relatives imprisoned by Israel or those who have suffered as a result of the conflict with Israel.
"The world is living through a long night of wars, destruction, fear, hate, racism and, at the present time, cold and snow," he said. Lamenting strife in Africa, Asia and the Middle East, he also urged worshippers "not to forget our own problems here: the prisoners and their families who hope for their release, the poor who have lost their land and their homes demolished, families waiting to be reunited, those out of work and all who suffer from the economic crisis."
Yet Twal called on people not to despair. "We are invited to be optimistic and to renew our faith that this land, home of the three monotheistic religions, will one day become a haven of peace for all people," he said.
"Oh Holy Child, God of goodness and mercy, look with kindness on the Holy Land and on our people who live in Palestine, in Israel, in Jordan and all the Middle East. Grant them the gift of reconciliation so that they may all be brothers — sons of one God," he said.
The number of visitors to Bethlehem remained below the record levels of the late 1990s, when Israeli-Palestinian peace efforts were at their height.
Following a Palestinian uprising that began in 2000, the numbers plunged. But thanks to a period of relative calm, they have been steadily climbing in recent years -- and got an extra push this year thanks to the resumption of peace talks.
"Our message is a message of justice and peace," said Palestinian Tourism Minister Rula Maayah. "We Palestinians are seeking peace and we deserve to have peace and our children deserve to live in peace."
Maayah said the number of visitors to Bethlehem was expected to jump by about 14 percent from last year.
A spokesman said 10,000 foreign visitors had entered town by the early evening, slightly higher than last year. Israel's Tourism Ministry, which coordinates the visits with the Palestinians, said the number could reach 25,000 during the holiday season.