Christmas is very important in the Palestinian territory of the West Bank as it contains Bethlehem, the town in which Jesus was born. Bethlehem is about six miles (10 kilometres) south of Jerusalem (which is in Israel). Bethlehem means 'house of bread' and back in history was famous for growing wheat for making into bread.
Only about 20% of Palestinians are Christian, but many Muslim Palestinians are also proud that Jesus was born in Palestine!
On Christmas Eve there is a parade through the town. This is very important to the Christian part of the population. There are bagpipe bands in the parade, which you might not expect! Playing the bagpipes is a tradition left over from when the British army occupied the area between 1920 and 1948. People also dress up as Santa Claus and give out sweets. The streets and main square are decorated with lights.