BETHLEHEM, West Bank: Increased tension between Israel and Palestinians has tempered celebration of the second Christmas in Bethlehem under Palestinian rule. While last year's Christmas Eve turned into a joyous national celebration, Tuesday's atmosphere was more subdued, reflecting recent setbacks and delays in Arab- Israeli peace negotiations. Palestinian leader Yasser Arafat, who failed to reach an agreement with Israeli Prime Minister Benjamin Netanyahu on Israel's long-delayed pullout from nearby Hebron, was at the biblical birth place of Jesus to commemorate Christmas. Tourists traveling to Bethlehem were met with a gantlet of Israeli checkpoints, sniper towers and barbed wire fences to reach Manger Square, where they were greeted by armed Palestinian soldiers. Violence earlier this year and the slowed peace negotiations have dampened tourism to the Holy Land this season. Shop owners who rely on Christmas holidays to sustain them through lean months are struggling. Israel's 43.3 billion tourism industry is in slump as well Hotel bookings are down 10-20 percent from last year and airlines are facing a similar drop. The tourism industry is hoping that potential tourists will once again flock to Israel once a successful resolution to the Hebron talks is reached.