Politics and Christmas in Bethlehem : Mideast: The West Bank town’s first public celebration of the holiday in six years is imperiled by a flap over a flag. Compromise is reached with Israeli authorities, but the mood is more somber than joyful.

Christmas decorations were up for the first time in years, Manger Square was packed with Palestinian Christians and foreign pilgrims and the Palestine Scouts had formed an honor guard for the Latin patriarch of Jerusalem outside the Church of the Nativity.

But attention this Christmas Eve was focused across the square, on the large Palestinian flag flying in front of Bethlehem’s town hall.

“Well, that’s where we are today,” said Elias Freij, Bethlehem’s mayor for more than two decades. “We are Christian and Palestinian, Palestinian and Christian--it’s our identity.”

The flag had not gone up without a struggle--one of those emotional, symbol-laden struggles that continue to mark the Israeli occupation here and the Palestinians’ resistance to it--and for a time the confrontation threatened Bethlehem’s first public celebration of Christmas in six years.

Twice the Palestinian flag had been raised on Freij’s instructions, and twice it had come down on the orders of the Israeli commander. When Freij threatened to cancel the celebration in protest, troops forced Bethlehem merchants to close their stores on their most profitable day of the year.

“Force based on violence and threats is all the Israelis seem to understand,” said Freij, 73, one of Bethlehem’s leading businessmen, as he fumed at the Israeli soldiers. “Forget what they say in the peace agreement--they want to bend us to their will, just as before.”

Finally, a compromise was reached between Freij and Brig. Gen. Gadi Zohar, the West Bank’s military governor: The Palestinian flag would not be flown from the town hall, complying with Israeli orders against its use on official buildings, but it could be flown on the poles in front of it.

Nafez Rifai, a local representative of Fatah, the mainstream group within the Palestine Liberation Organization, declared in triumph: “The Israelis must know that we set the rules in our city, not them. This is a victory, and the Israelis know it very well.”

And PLO Chairman Yasser Arafat, in a three-page message faxed from his headquarters in Tunis, Tunisia, said he hoped to join the people at Bethlehem’s midnight Mass next Christmas.

“We pray to God the Almighty that we celebrate this blessed occasion next year reunited in our holy homeland, to pray together in the Church of the Nativity in Bethlehem,” Arafat said, calling on all Palestinians, Muslim and Christian alike, to work together to build an independent state.

“Why do the Palestinians have to make everything, even Christmas, so political?” Major Benny grumbled as he watched the Scout troops march past with more Palestinian flags. “Can’t they just go to church and pray? Why always politics, politics, politics?

“Bethlehem used to be such a nice town,” Benny continued (Israeli censorship regulations prohibit publication of his family name). “It used to be quiet, a religious town, a place for pilgrims and tourists. I even used to bring my family here for lunch. Now it’s politics, politics, politics.”

Bethlehem did indeed change through the six years of the intifada , the Palestinian rebellion against Israel’s long occupation of the West Bank and Gaza Strip. Its traditionally conservative townspeople have turned increasingly radical, and even business people devote much time to politics.

“We have had nearly 27 years of Israeli occupation--that’s more than a generation,” Bethlehem’s deputy mayor, Hanna Nasser, the owner of a textile factory, commented. “Military occupation is never benign, and it leads people to rebel. In essence, that is what’s happened here. We rebelled, and Israel’s attempts to crush that rebellion made us all the more determined.

“Take this crisis over the flag, and you have an illustration of why people have gone radical. We raise the Palestinian flag to mark what is for us Christians and for our Muslim brothers as well a national holiday. We did it because we thought we had a peace agreement and the army says no. . . . This is what turns businessmen into political activists.”

Bethlehem and the adjoining villages of Beit Sahur and Beit Jalla are now political bases for the militant Islamic Resistance Movement, known as Hamas, the radical group Islamic Jihad and the Marxist Popular Front for the Liberation of Palestine--all opponents of the accord on self-government that Israel has concluded with the PLO.

“People here want peace, but they want a peace in which Israel leaves our land,” said Khalid Saada, 35, the owner of a stationery store, who was exiled for a year to southern Lebanon with Muslim fundamentalists on suspicion of supporting Hamas. “Under this agreement, the (Jewish) settlers stay and the Israeli army stays.

“What kind of peace do we then have? One in which the PLO becomes the administrator of the occupation? One in which we must continue to do the Israeli bidding to get the right to travel on this or that road, to open a school, to come and go from the country? Autonomy is not halfway to independence, but halfway to nowhere.”

Elias Rishmawi, 45, owner of a pharmaceutical firm in Beit Sahur and a political activist identified with the Popular Front, was equally pessimistic, arguing that above all else the autonomy agreement failed to satisfy “the sense that justice has long been denied us as Palestinians.”

Rishmawi said the basic accord had been poorly and hastily negotiated and that the current difficulties in implementing it are only the first such problems. But its main problem, he continued, is that it addresses Israeli needs far more than Palestinian ones and consequently is seen as a half-measure.

“People are not satisfied with it, and their active dissatisfaction will mean it will not bring peace,” Rishmawi said. “I am full of pessimism.”

Even the representatives of Fatah, the mainstream group within the PLO, were less than optimistic about successful implementation of the peace accord.

“Incidents like this over the flag just drive knives into the agreement and into people’s confidence in it,” Suleiman Adani, a Fatah activist, commented. “While people are waiting for the big results, they see all the nasty little things Israelis do. So there is disquiet in Bethlehem and the other towns.

“If the accord were put into effect quickly, however, and without all these little ‘knifings,’ as I call them, then confidence would come back.”

Manuel Hassassian, a political scientist and dean of arts at Bethlehem University, described Bethlehem and the West Bank as a whole as “preparing for the future with hope, looking at the past with anger and living through the present as if we were in a gray fog with nothing very clear.”

The political radicalization, particularly the open support for militant Islamic groups, that has occurred in Bethlehem is typical for the West Bank, Hassassian said, but more dramatic here because of the town’s previous conservatism, its strong business class and Christianity’s long history here.

“We have a whole generation of men now in middle age who watched their fathers beaten down by the Israelis and who decided then that this would not happen to them,” Hassassian said. “And, of course, they are urged on by their sons. In Bethlehem, you can see the depth of political change on the West Bank.”

Freij as Bethlehem’s mayor, for example, had long pursued a policy of avoiding confrontation with the Israelis, fearing this would destroy the tourist trade that is the town’s economic base. Even Israel’s deportation of 25 Bethlehem residents a year ago to south Lebanon as suspected Islamic fundamentalists drew only a mild protest from Freij.

But Freij has since been to Tunis to talk with Arafat--more than once--and he is clearly positioning himself for the Palestinian elections planned for next year.

Fatah, which once had a strong network of cells in the Bethlehem area, has had to share the political space here with more radical groups in recent years--a development that Hassassian said reflects “the serious frustration with the old politics and the failure of the moderation that characterized Bethlehem.”

Although Muslims became the majority in the Bethlehem area as Palestinian refugees arrived from Israel in 1948, Islam did not provide their rallying cry until the intifada .

“Hamas is really not very big, even now,” Rishmawi contended, “but it is effective and its ideology has real drive. People support Hamas not as Hamas but because it has stood up and fought when the national leadership (in Fatah and the PLO) has been slow and confused.”

Even the town’s once-prosperous business leaders found that only by getting involved in politics could they shape Bethlehem’s economic recovery.

“Those businessmen who thought they could stand aside from politics found themselves standing amid the ruins of the Palestinian economy,” Rishmawi added.