Bethlehem, West Bank - Once again, there is no room at the inn in Bethlehem.

After years of poor bookings in Bethlehem's hotels over Christmas because of the ongoing Israeli-Palestinian violence, the Biblical city is reporting a record number of tourists.

Tens of thousands are visiting the West Bank city located just several kilometres south of Jerusalem this festive season, Palestinian and Israeli officials said Monday.

The number of Christians and pilgrims visiting Bethlehem throughout 2008 already passed the 1 million mark weeks ago, and is expected to reach 1.2 million by the end of the year.

That is the highest since 2000, a peak year highlighted by the turn of the millennium and an historic pilgrimage of Pope John Paul II in the spring, but also marred by the outbreak of the Palestinian Intifada (uprising) late that year.

The Intifada has all but ended in the West Bank, although it continues to rage in the form of Palestinian rocket attacks from and Israeli retaliatory raids in the Gaza Strip.

Some 250 buses with 12,500 tourists are expected to arrive in Bethlehem on Christmas Eve alone, said the Palestinian Tourism Ministry's office in Bethlehem.

The town's some 3,000 hotel rooms are almost fully booked and new restaurants have opened over the past years.

"We need more hotel rooms," said Bethlehem Mayor Victor Batarseh, pointing out that while the few tourists who did visit Bethlehem during the past years spent only several hours in the city, "now we have lots of tourists who come here and use tourist facilities like hotels, restaurants and so on."

"Until 2006, tourism in Bethlehem almost disappeared, especially during the worst years of the Intifada," he said, noting that over the past two years this had begun to change thanks also to churches worldwide which worked hard to "present Bethlehem as a safe city."

Despite the returning joy to the historic town which for years looked anything but festive, Palestinians point out that an eight-metre concrete wall, part of Israel's controversial West Bank security barrier, continues to separate between it and nearby Jerusalem and cut it off from the rest of the West Bank.

Visitors must to pass through a large metal gate in the wall, guarded by Israeli soldiers in booths, to cross into the city on the road from Jerusalem.

Palestinian officials also point out that economically, Israel benefits more from the influx of tourists than the Palestinian autonomous areas, because most who spend time in Bethlehem are day visitors, who spend the night in hotels in Jerusalem or elsewhere.

Israel has organized a 24-hour shuttle service for tourists travelling from Jerusalem to Bethlehem and back on Christmas Eve, and has promised to ease the passage through military roadblocks around Bethlehem and Jericho during the holiday.

For Israel, 2008 witnessed an all-time record in tourism, with 3 million foreigners visiting the country, some 13 per cent more than the previous record year of 2000, a Tourism Ministry spokeswoman said. Some 2 million of them were Christian tourists and pilgrims.

Christmas celebrations in the region are scheduled to start at noon Wednesday with the annual procession led by the new head of the Roman Catholic Church in the Holy Land, Latin Patriarch Fouad Tiwal.

The procession is to start from the Latin Patriarchate in the Old City of Jerusalem and end on Bethlehem's central Manger Square, which houses the Church of Nativity, a medieval fortress-like building that according to Christian tradition marks the site where Jesus was born.

Tiwal, 68, a Jordanian-born Christian, has succeeded former Latin Patriarch Michel Sabah, a Palestinian Christian from Nazareth who retired this year at the age of 75.

He will lead his first Midnight Mass at the Church of Nativity Wednesday night in the presence of Palestinian President Mahmoud Abbas and other Palestinian and foreign dignitaries.

While Catholics and Protestants celebrate Christmas Day on Thursday, Greek Orthodox Christians mark the birth of Christ on January 7, while Armenian Christians do so on January 13. All three denominations have their own procession and conduct their own mass in separate basilica housed in the Church of the Nativity building according to their traditional dates.