The traditional birthplace of Jesus is preparing to welcome a record number of tourists in its first year of relative calm in the West Bank since 2000, Bethlehem's mayor said on Monday.

Victor Batarseh said at his annual news conference ahead of Christmas and the New Year celebration that there has been a "clear improvement in the situation of tourism since the beginning of the year."

He said the West Bank town where Christians believe Jesus was born was expecting to host more than a million tourists and pilgrims "from now until the end of the year."

Some 5,000 hotel rooms in the town on the southern outskirts of Jerusalem are fully booked for Christmas week, Batarseh said.

Bethlehem was hard hit following the outbreak of the second Palestinian intifada in 2000 and the building of the Jewish state's controversial West Bank barrier that encircles much of Bethlehem.

The revival of the local tourism industry has also led to a sharp drop in unemployment from 50 percent in 2005 to 22 percent in 2008, Batarseh said.

The Palestinian mayor nevertheless decried the Israeli military presence and roadblocks around the town.

"As mayor, it is my duty to turn your attention to the suffering endured by the residents of this town and the humiliation and injustice that the (Israeli) occupation puts them through," he said.

The relative improvement of the occupied West Bank's economy was one of the few visible achievements of the US-backed Middle East peace talks which were launched in November 2007 but have failed so far to yield a peace treaty.