The largest number of pilgrims in a decade have gathered in Bethlehem to celebrate Christmas.
Tens of thousands flocked to the Church of the Nativity, built on the site where tradition holds that Jesus was born, for Saturday morning prayers.
Israeli military officials, who coordinate movement in and out of the West Bank, said more than 100,000 pilgrims have come to the town since Christmas Eve, compared to about 50,000 last year.
They said this is the merriest Christmas in Bethlehem in years.
In contrast, Christians were marking a sombre Christmas in Baghdad in the face of repeated violence by militants intent on driving their beleaguered community from Iraq. Archbishop Matti Shaba Matouka said he hoped Iraqi Christians would not flee the country.
Hundreds gathered at a Baghdad church where Muslim extremists took more than 120 people hostage in a stand-off in October that ended with 68 dead. Church walls were pockmarked with bullet holes, plastic sheeting covered gaps where glass windows used to be and small pieces of dried flesh and blood remain stuck to the ceiling.
After the siege, about 1,000 Christian families fled to the relative safety of northern Iraq, according to UN estimates.
Christmas was marred by violence in the Philippines. A bomb exploded during Christmas Day Mass at a police chapel in the volatile southern Philippines, wounding a priest and five churchgoers.
The improvised explosive was hidden in the ceiling of the chapel, which is located inside a police camp in Jolo town on Jolo Island, a stronghold of al Qaida-linked militants.
In Bethlehem, pilgrims and tourists posed for pictures and enjoyed the morning sunshine, while others thronged the Church of the Nativity for mass. Worshippers also packed the Roman Catholic church built next to the grotto where the traditional site of Jesus's birth is marked.
Pilgrims have slowly been returning to Bethlehem since violence between Palestinians and Israelis slowed down over the past five years. The town's 2,750 hotel rooms were booked solid for Christmas week, and town officials say more hotels are under construction.
The warm weather, a sharp decline in Israeli-Palestinian violence and an economic revival in the West Bank all added to the holiday cheer this year. Only one third of Bethlehem's 50,000 residents are Christian today, down from about 75% in the 1950s. The rest are Muslims.
Signs of the violence are still present. Visitors entering the town must cross through a massive metal gate in the separation barrier that Israel built between Jerusalem and Bethlehem during a wave of Palestinian attacks during the last decade.
The Israeli military said it attacked a "terror training facility" and a weapon smuggling tunnel in Gaza overnight. The coastal area's Hamas rulers said nobody was hurt in the Israeli airstrikes.
Some 500 members of the Gaza Strip's small Christian minority left the blockaded territory on Thursday for the festivities in Bethlehem. About 3,500 Christians live in Gaza among 1.5 million Muslims. Relations were traditionally good but there have been incidents of violence against Christians since the Islamic militant group Hamas took control three years ago.
Christians make up only about 2% of the population in the region today, compared to about 15% in 1950. Like many other Christian communities across the Middle East, many have migrated to flee political tensions or in search of better economic opportunities.
The Roman Catholic Church's top clergyman in the Holy Land, Latin Patriarch Fouad Twal, issued a conciliatory call for peace between religions during his homily in Bethlehem on Christmas Eve and urged an "intensification" of dialogue with Jews and Muslims.
"During this Christmas season, may the sound of the bells of our churches drown the noise of weapons in our wounded Middle East, calling all men to peace and the joy," he said.