This Christmas, unlike 1,988 years ago, there's plenty of room at the inn in Bethlehem.

The "intifada," a yearlong Palestinian uprising in the Israeli-occupied West Bank and Gaza Strip, has scared off would-be foreign visitors to the town where, the Bible says, Jesus was born in a manger because all the inns were full.The tourists have gone looking for peace on earth outside the Holy Land.

Tourism, Israel's largest industry, has dropped 15 percent from a record 1.3 million tourists in 1987. Hotels in Bethlehem and nearby Jerusalem have been especially hard hit.

Foreigners have been put off by news film showing armed Israeli soldiers battling stone-throwing Palestinians. More than 330 Arabs have died in the revolt, most of them shot during demonstrations.

In Nazareth, the largest Arab city inside Israel, and Jesus' boyhood home, officials hoped to gain tourism diverted from Bethlehem in the West Bank. But celebrations there too were to be muted.

"Next Christmas we hope things will be much better than they are now and we'll celebrate peace in the Middle East," Bethlehem Deputy Mayor Hanna Nasser said.