O little (divided) town of Bethlehem

This year's traditional nativity scenes reflect the bitter

conflict raging in the Holy Land: a separation barrier divides the wise men from the baby Jesus. Donald Macintyre reports

conflict raging in the Holy Land: a separation barrier divides the wise men from the baby Jesus. Donald Macintyre reports

The Bethlehem craftsman Tawfiq Salsaa says simply that he was "inspired" to produce the first model with a "political meaning" he has turned out in more than half a century of continuous carving in olive wood and mother of pearl. "I was thinking about our problems and I thought that if Jesus was to come here today, he would find a wall. Then I started working on it. That's how it came to express our situation."

"It" is certainly the most striking crib you'll find this Christmas, deftly combining the nativity with the stark realities of Bethlehem 2,007 years later. Its beautifully carved wooden parts, detachable for easier packing and dispatch, depict the familiar scene of the infant Jesus, Joseph and Mary, the three wise men, complete with camels, and depending on the buyer's taste, a palm tree or a stable, to indicate that there was no room at the inn.

But in the middle, separating Magi from manger, is an unmistakable representation of the Israeli military's separation barrier, the forbidding eight-metre-high wall that snakes round Bethlehem from the terminal-like checkpoint at the northern entrance to the city and which leaves such an indelible impression on every first-time pilgrim on their way to the Church of Nativity from Jerusalem at this or any other time of the year.

Sipping a cup of tea in the living room of his home in the mainly Christian Bethlehem suburb of Beit Sahour, Mr Salsaa, a mild-mannered 66-year-old Palestinian Catholic grandfather who started out helping his master-carver father here 54 years ago, and now employs five workers at his own factory, seems an unlikely icon for the politically correct. Beneath his own Christmas tree, decorated with gently flashing lights and red ribbons, is an entirely conventional, though also expertly made crib his own work of course.

Yet in the past few weeks he has sold 400 versions of his 2007 nativity-with-a message, thanks in large part to the Amos Trust, a British Christian charity which advertises them at 12 or 50 in a larger version "perfect for a church" as "poignant, ironic, and made in Bethlehem"; has been denounced by various pro-Israel Jewish groups for what the United States-based Anti-Defamation League has called "a shameful, cheap gimmick ... destroying the spirit of Christmas"; and has had a productive hands-on collaboration with Banksy, the elusive Bristol-born graffiti artist and leftist enfant terrible.

There is no doubt that Mr Salsaa, who though not a political activist is a staunch Palestinian nationalist, is as affronted as every other Bethlehem resident by the wall, which has cut them off from neighbouring Jerusalem, the city with which it once enjoyed the closest social, economic and religious links.

"It's disgusting," he says. "We are in a chicken cage." For Mr Salsaa, who last managed to get a permit, as part of a church delegation, to visit Jerusalem a year ago, it is one of several factors behind Bethlehem's marked economic decline. This in turn helped to trigger the much-discussed flight of (often, but not always, relatively prosperous middle-class) Christian Palestinians from the city, and indeed from the West Bank altogether. He calculates that since the Six Day War, but mainly since the beginning of the intifada in September 2000, which made Bethlehem a frequent theatre of conflict between militants and Israeli forces, about two-thirds of his extended family or clan between 250 and 300 people have gone abroad, chiefly to the US. "The reason was economy and no security; people didn't feel safe." He insists that this had nothing to do with reported friction between Muslims and Christians. "We have warm relations," he says. Indeed he turned out models of Jerusalem's Dome of the Rock hallowed in Islam at one point but adds ruefully that there were few takers. "There were not enough visitors here from Islamic countries." Why hadn't he left himself? "Well, I thought about it," he said. "But I don't speak good English and I suppose I liked to stay here."

In fact he has fared better than some of his fellow carvers catering for the tourist/pilgrim market who did well in the aftermath of the Oslo accords but saw their takings slump after the breakdown of the Camp David talks in 2000 and the subsequent intifada. Thanks in part to his entrepreneurially minded son Wissam, he has beamed his business at the export market among Christians in the US and Europe. Nevertheless, even he had to close his factory down for a year after the intifada began a year that he spent carving in olive wood and from nothing more than his memory a stunning, instantly recognisable, 5ft by 5ft, scale model of Jerusalem's Old City.

It was as a result of this intricately carved piece that his path crossed with that of Banksy, who returned to Bethlehem this winter, produced six striking new anti-occupation works on various rocks, walls and slabs of the steel and concrete barrier itself, and opened his new "Santa's Ghetto" in the city's Manger Square. Among the many works on display at the gallery which Banksy has decided can only be bought by collectors prepared to visit Bethlehem in person, and the entire proceeds of which will be donated to local children's and young people's charities is Mr Salsaa's splendid model. It is exactly as he carved it except in one respect: half a dozen dark Israeli military watchtowers have been added by Banksy himself. Associates of Banksy, whose fans reputedly include Brad Pitt and Angelina Jolie, predict that the work will fetch significantly more than its reserve price of $175,000 (88,200). In keeping with the enigmatic nature of Banksy's Macavity-like foray to Bethlehem during which several supposed sightings of him appear to be urban myths the exact logistics of Mr Salsaa's collaboration with him remain a little unclear. Before remembering that that there is something of a taboo on discussing the artist's presence, Mr Salsaa says straightforwardly enough that Banksy came to his house to install the watchtowers over two days. "He was normal. He did a lot of drawing when he was here. I didn't even know who he was at first."

Back at Santa's Ghetto, his son Wissam gamely, perhaps, seeking to perpetuate the mystique surrounding the British artist's presence in the city goes so far as to suggest his father might have been mistaken. Either way, however, Banksy bought the work for well over $100,000. And father and son say they are well pleased with the outcome. By using the wall itself and encouraging other artists to do so as a "massive canvas" for his pictorial comments on the conflict, Banksy, says his spokeswoman, Jo Brooks, is also hoping that it will itself become a "tourist attraction".

But the artist is only one of two famous Britons who have used this pre-Christmas period to draw attention to the problems of Bethlehem while also encouraging tourists to visit the city.

The other, of course, is Tony Blair, now the international Middle East envoy, who last week called for more visitors to help the Palestinian economy and declared before spending a night last week in the city's Intercontinental Hotel: "Bethlehem is safe and a great place to visit. Everyone who can should share the experience." But Mr Blair, who is trying to promote tourism in Bethlehem as one of his four "Quick Impact Projects" to create some jobs, went a little further. He added that "it would be a great place if the context was different", and went on to depict Bethlehem as a litmus test for Israel's commitment to peace. "The real test of the sincerity of the Israeli side is if we really get change here in Bethlehem."

Partly thanks to Mr Blair's efforts, this Christmas, at least, already looks like being significantly better than last year's. The Israeli Tourism Ministry, preparing for 60,000 Christian pilgrims to the Holy Land compared with 40,000 last year, has assigned extra staff at the main crossings into Israel and the Jordan Valley to ensure "pleasant and quick passage" for Christian visitors, and has promised half-hourly shuttle buses from the Mar Elias monastery between Jerusalem and Bethlehem to the Church of Nativity on Christmas Day and Christmas Eve to speed worshippers through the checkpoint.

But the barrier will be a burning issue for far longer than this Christmas rush and not just round Bethlehem but for the whole of its 450-mile route, much of it cutting into the West Bank, dividing many communities from their relatives and neighbours, agricultural land and, sometimes, schools, universities and 24-hour medical services trapping some 50,000 Palestinians between it and the 1967 Israeli-border. Around Bethlehem, the barrier will, in the words of a UN report in July this year, "sever the last route between Bethlehem and Jerusalem and isolate the majority of Bethlehem's agricultural hinterland". Some two miles into the West Bank side of the 1967 green line, it means that farmers in its western districts will only be able to reach their land by going through a tunnel that passes under it. In the north of the city, where the barrier also encloses the approach to Rachel's tomb to protect Jewish worshippers there, the local Chamber of Commerce estimated in 2005 that 72 of the 80 Palestinian businesses in the area had closed down. Part of the barrier's purpose is to close off Bethlehem from Jerusalem as well as the much closer Gilo and Har Homa. Both are officially regarded by the international community as settlements in occupied territory and by Israel as Jewish neighbourhoods in land it unilaterally annexed after the Six Day war.

And both are now on the "Israeli" side of the barrier. It was Israel's plan to build 300 new homes at Har Homa, known to generations of Arabs as Abu Ghneim, which soured the first negotiations to follow last month's Annapolis summit.

Jon Benjamin, the chief executive of the British Board of Deputies for British Jews, reacted to Mr Salsaa's nativity by telling the Cybercast news agency that the barrier had been a "necessary response to terrorism". He added: "The irony is that Mary and Joseph would have been a Jewish couple, and if they were travelling through the West Bank today, [their lives would have been at risk] from the same terrorists that have targeted so many Israelis."

Mr Salsaa disagrees, insisting simply that if Israel conceded Palestinians a state on the land it occupied in 1967, with East Jerusalem as its capital, there would be no need for the wall round Bethlehem. "If Israel leaves the area of 1967," he says, "that will bring it security".

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