KEY POINTS:
In one of the unfailing ironies of the place religious believers call the Holy Land, its most famous emblem of peace - the little town of Bethlehem - is once again a symbol of its troubles.
Its economy is in crisis. Concerns over security are keeping many tourists away. Israel's security wall has cut the town off from much of its agricultural hinterland.
Unemployment stands at 65 per cent. The West's financial boycott of the Palestinian Authority has meant no salaries have been paid at the municipality for four months.
It is a complex business.
The wall reflects legitimate Israeli security concerns; half the suicide bombers in 2004 are said to have come from Bethlehem.
Although Israel ceased its military activity in the Gaza Strip a month ago, Palestinian militants continue to launch rockets against it from there.
On the other side, the recent escalation of internecine strife between the Palestinian factions has added to the tensions which have been building since voters ousted the corrupt Fatah leadership and replaced it with the more militant Hamas.
Yesterday, fierce gun battles raged between the two groups; some predicted all-out civil war.
But Bethlehem tells us something revealing. The Archbishops of Canterbury and Westminster, who arrived there on a Christmas pilgrimage last week, have expressed concern - not just at the barrier that is "strangling" the place, but also at the flight of Christians from the town. Christians constituted more than 85 per cent of the population in 1948; today they comprise just 12 per cent.
This matters, because it is the Christians who own most of the town's hotels, restaurants and shops. Throughout the West Bank and Gaza, there is an exodus of the middle classes responsible for what little prosperity there was. Prosperity for Palestinians is the key to peace.
A meeting is urgently needed between President Abbas and Israeli Prime Minister Ehud Olmert.
High on the agenda must be the rocket attacks on Israel and the Israeli incursions into the Palestinian territories. They must also make progress on the release of Palestinian prisoners, in which they would be helped by Hamas freeing the Israeli soldier it captured last June.
That would be an important signal from Hamas that it intended to continue to move along the path of political realism it adopted by contesting the elections in the first place.
But their guiding strategy must be to give the Palestinians the prospect of prosperity.
Olmert needs to look beyond short-term security considerations and ease those Israeli restrictions that are hampering the organic growth of the Palestinian economy.
A new horizon of prosperity, even more than symbolic political gestures, is essential to dispel the sense of despair that grips so many Pale-stinian youths.
In the midst of it all, the innocents - terrified children, disabled people, women cut off from hospitals by security checkpoints - continue to suffer.
- INDEPENDENT
