JERUSALEM, Dec. 24 (JTA) — Israeli soldiers withdrew from the center of Bethlehem this week, when Christmas was marked beneath gray skies and a gray mood. The army withdrew to the outskirts of Bethlehem on Tuesday to allow Christmas celebrations to take place in the city without tanks nearby. The army said it would allow into Bethlehem all Israeli Arab Christians and Christian residents of the West Bank who have special permits, as well as foreign residents, tourists and journalists. Israel also announced it would provide free public transportation to any Christian Arab from the region who wants to travel to Bethlehem in the coming days. Although soldiers were not in the center of Bethlehem, local leaders canceled all Christmas festivities except religious observances to protest the continued Israeli presence there. As a result, there was no light-festooned Christmas tree in Manger Square, no bells, no music — and few pilgrims. Israeli troops took control of the city earlier this year following a series of Palestinian terror attacks launched from the area. The troops then withdrew under a plan to turn over security arrangements in Bethlehem and other West Bank areas to the Palestinians. The troops returned after another Palestinian from the Bethlehem area carried out a deadly attack aboard a Jerusalem bus in late November. The Israeli-Palestinian conflict has devastated the tourist industry of Bethlehem, which according to Christian tradition is the birthplace of Jesus. Bethlehem Mayor Hanna Nasser called this year’s holiday a “sad Christmas.” The only way to end suffering on both sides, he said, is to create an independent Palestinian state. “We hope next year we’ll have a better Christmas and a real one,” he added. For the second year running, Israel barred Palestinian Authority President Yasser Arafat, a Muslim, from traveling from Ramallah to attend midnight Mass in Bethlehem. Until last year, Arafat had attended every Christmas Eve Mass in Bethlehem since 1995, the year the Palestinian Authority took control of the city. Critics said he had turned the event from a Christian religious celebration into a political event designed to promote Palestinian nationalism. Speaking to a Christian delegation at his Ramallah headquarters on Monday, Arafat condemned the Israeli ban. A senior Israeli army official defended it, saying the Palestinian leader has done nothing to halt terrorism. “Arafat is the one who harms Christians the most with his campaign of killings and terror,” the coordinator of government activities in the territories, Maj. Gen. Amos Gilad, said on Army Radio. Latin Patriarch Michel Sabbah, the Catholic Church’s highest official in the Holy Land, made the traditional procession from Jerusalem to Bethlehem on Tuesday afternoon. He was accompanied by mounted Palestinian police. Hundreds of people gathered to greet him, including a group of several dozen international demonstrators — joined by some Israelis and Palestinians — who held banners protesting the Israeli presence in Bethlehem. Bassam Bannoura, pastor of the Shepherd’s Field Baptist Church in neighboring Beit Sahour, told The Associated Press that Christians are leaving the Holy Land for two reasons, the hardships caused by the Israeli military and the rise of Islamic fundamentalism.