The attack, the deadliest in Israel’s history, resulted in the deaths of 1,208 people, according to an AFP tally of official Israeli figures.
Israel’s retaliatory war in Gaza has left 45,338 people dead, according to the health ministry in the Hamas-run territory, figures the UN considers reliable.
Traditionally in Bethlehem, a grand Christmas tree would light up Manger Square, but local authorities opted against elaborate celebrations for a second year.
“This year we limited our joy,” Bethlehem mayor Anton Salman told AFP.