Palestinians Rejoice in an Unoccupied Bethlehem : West Bank: Israeli army’s pullout sparks round-the-clock celebrations. Yasser Arafat attends Christmas Eve Mass in Church of the Nativity.

Celebrating their first such holiday in 28 years free of Israel’s military occupation, Palestinians held a joyous midnight Mass on Christmas Eve in the Church of the Nativity, built where tradition holds that Jesus was born in a manger nearly 2,000 years ago.

Bells tolled at midnight, just minutes after Palestine Liberation Organization Chairman Yasser Arafat, a Muslim, his Christian-born wife, Suha, and several ministers of the Palestinian Authority swept into the church to attend the Mass. Latin Patriarch Michel Sabbah, himself a Palestinian, presided over the service.

Conspicuously absent were any Israeli officials. The Israeli army pulled out of town Thursday, and Bethlehem has been celebrating round-the-clock ever since.

Israeli police and soldiers escorted Sabbah on his traditional pilgrimage Sunday afternoon from Jerusalem to Bethlehem, but they were met on the outskirts of town by Palestinian police, who escorted the patriarch to the Church of the Nativity.

“It is upon this message of peace and love that new Palestinian freedom could be built and not on external manifestations and celebration of Christmas,” Sabbah said.

Mayor Elias Freij, a Greek Orthodox who has always advocated Israeli-Palestinian coexistence, said Israeli officials will be welcome again in Bethlehem once Israelis and Palestinians complete their peace negotiations.

“Some Israeli officials expressed interest in coming [to the Mass], and I said that they were welcome to come without their guns,” said Freij in a Sunday interview with The Times. “The square is full today. We do not want any bloodshed, but if they came in with guns, there might be an argument and shooting.”

For years, Freij--who was first elected in 1972--has hosted successive Israeli prime ministers, the Israeli military governor of Bethlehem and other Israeli officials at his annual Christmas reception.

“We were under occupation. We had no choice” but to invite the Israelis then, Freij said. The last such reception was in 1987, just two weeks after the Palestinian uprising, or intifada, erupted against Israel’s rule of the West Bank and Gaza Strip. Then-Prime Minister Yitzhak Shamir attended that party.

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Freij said that even though Israeli officials were not invited to join in the Christmas celebrations, unarmed Israeli tourists were welcome in the town, just south of Jerusalem.

Shlomo Dror, spokesman for Israel’s civil administration--the military bureaucracy charged with running Palestinian affairs in the occupied territories--observed, “We were not surprised and we were not hurt” by Freij’s decision not to invite Israeli officials.

Manger Square was packed with tens of thousands of Palestinians from all over the West Bank on Sunday night. Many were Muslims who came to celebrate the Palestinian Authority’s arrival in Bethlehem rather than to mark the birthday of Jesus.

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Crowds of young men danced and sang songs praising Arafat’s Fatah faction of the PLO--even as choirs from around the world sang familiar Christmas carols on a stage erected outside the Church of the Nativity. Vendors grilled meat on skewers and sold warm sodas as revelers waded through garbage strewn across the square.

“It is not the spiritual experience we had expected,” said David Sadick, a Seattle lawyer who had planned his trip to Bethlehem on Christmas Eve for years and was visiting with his daughter Angela Walum.

“It looks like a lot of guys are down here, probably looking for babes,” said Sadick. “I don’t say it judgmentally, but in Seattle, in my church, Christmas is this spiritual event. I thought it would be intensified here, but it isn’t.”

George Harb, a Christian member of the Bethlehem municipal council, said, “The spirit of Christmas is gone.” Harb said he decided to stay away from Manger Square when he saw village youths flooding into it Sunday afternoon.

But Israelis took some comfort from the peacefulness of the Bethlehem crowds. Although the atmosphere more closely resembled an outdoor rock concert than a gathering of religious pilgrims, no weapons were fired.

The pullback of its troops from Bethlehem has made Israel’s withdrawal from Palestinian towns and villages in the West Bank uncomfortably tangible for Israelis in Jerusalem, the nation’s capital and largest city.

Israeli newspapers last week ran stories highlighting fears of Jerusalem residents who live in neighborhoods abutting what are now Palestinian-controlled areas; one newspaper published a list of weapons that Palestinians could fire from territory they control near the capital into Jewish neighborhoods.

And nothing has proved more potent evidence for Israelis of the depth and the pace of the withdrawal than the sight of a triumphant Arafat basking in a hero’s welcome in Bethlehem, a five-minute drive from the Jewish Jerusalem neighborhood of Gilo.

Jewish settlers held a candlelight vigil outside Rachel’s Tomb in Bethlehem on Sunday evening to protest the army’s withdrawal from the city.

Under an Israeli-Palestinian accord, Israeli soldiers will continue to guard the tomb, which will be open to all faiths. Jews believe that Jacob’s wife Rachel is buried there.

Bethlehem is the sixth West Bank town that Israeli troops have withdrawn from under an Israeli agreement with the PLO.

The Israelis plan to pull out of one more town, Ramallah, this year, before Palestinians hold elections Jan. 20 to select their first self-rule government.

Curtius is a Times staff writer and Assad is a special correspondent.