Relative calm between Israelis and Palestinians has apparently helped persuade Christians that it's safe to visit, after years of violence frightened many away.
Around 65,000 tourists are expected to visit the traditional site of Jesus' birth, Mayor Victor Batarseh said at his traditional pre-Christmas news conference, basing expectations on the number of visitors who came to Bethlehem in November - about 64,000.
That's four times the number of visitors who came in Christmas 2005, when just 16,000 tourists trickled into the town.
"We are all set to move ahead," Batarseh said. He attributed the tourist upsurge to churches abroad urging their congregations to visit Bethlehem, and word-of-mouth by tourists who had already visited the cobblestone city.
But it's not beginning to look a lot like Christmas, at least not yet. Christmas trees, tinsel and neon reindeer are markedly absent from the town and its expansive plaza facing the Church of the Nativity, because of problems between Bethlehem city hall and the Palestinian Authority.
It's hoped the problem is only temporary.
The Authority has set aside a budget of $50,000 to deck out the town, and it's expected to be decorated by next week, Batarseh said.
The tourists are coming despite the separation barrier, which encloses Bethlehem on three sides with grim concrete walls, which has ravaged the town's economy, he said.
Israel says it built the barrier to prevent Palestinian suicide bombers from reaching Israeli population centers. Palestinians view the structure, which dips into parts of the West Bank, as a land grab.
"It is imprisoning us and making life almost impossible," the mayor said. But tourists are helping the town, he said, by breaking "the wall of the separation barrier _ not physically, but psychologically."