OLYMPIA, Wash. — The holiday displays that have previously competed for attention on the state's Capitol campus are now co-existing peacefully.

A Nativity scene was set up this week a couple hundred feet away from a display that declares "there are no gods." Ron Wesselius, who has helped provide the Nativity exhibit for the past few years, said he would like to have it inside the Capitol building but is otherwise pleased with how the system is working.

"Everyone has the same rights," he said.

State officials have been grappling in recent years with how to balance the First Amendment issues of religion and free speech. In 2008, displays within the Capitol escalated into a controversy and the state eventually declared a moratorium on the exhibits.

Since then, the state agency that permits such holiday displays has banned them from inside the Capitol and required them to be set up outside. Steve Valandra, a spokesman with the Department of Enterprise Services, said they haven't had any problems with the new system and are satisfied that it strikes the right balance.

"It's a lot better than the circus we had three years ago," he said.

The state has continued to seek a balance on religious issues this year. Officials have refused to allow some religious conduct on state property — baptisms and religious speeches, for example — citing constitutional limits that say "no public money or property shall be appropriated for or applied to any religious worship, exercise or instruction, or the support of any religious establishment."

But the state has approved other activities such as prayers, church picnics and advertising for fundraisers sponsored by houses of worship.

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Annie Laurie Gaylor, co-president of the Freedom From Religion Foundation, said it's disturbing that religious displays are taking up state property in Olympia and around the country. She said the group only put up its sign, which celebrates the winter solstice, in protest that public property would be dedicated for a Christian devotion.

"If there's going to be religion at the Capitol, then we will be there, too," she said. A Menorah was also allowed to be placed at the state's Sylvester Park.

Valandra said the religious displays are allowed because they are considered an expression of an idea or opinion just like the atheist sign.