[Catherine Callaway, Cnn Anchor:] The Israeli army has pulled back to the outskirts of Bethlehem. Israeli Defense Forces say that the move is to allow Christian celebrations to take place in the city of Jesus Christ's birth. Let's turn to Kelly Wallace, who is in that city and is joining us now by telephone. Hello Kelly. I understand you're on the way to Manger Square.
[Kelly Wallace, Cnn White House Correspondent:] Catherine, I've actually made it to Manger Square. That's where we're reporting from right now, and there is a lot of activity here. Christians gathering for the annual procession, taking place about a half an hour from now, headed to the Church of the Nativity here. That decision by the Israelis was somewhat expected, because Israel, Catherine, was facing tremendous international pressure, even pressure from the Vatican, to pull its forces at least out from the town's center to allow Christian celebrations to take place. The Israelis say they were here because after a November 21 suicide bombing, that bomber was from Bethlehem, and that bombing resulted in the deaths of 11 Israelis. So, Israeli forces say they have been here because of security reasons, but they are pulling out to the outskirts of this city. We do know, Catherine, that Christians of Israeli-Arab descent will be allowed to attend services here in Bethlehem. They're coming in sort of organized busloads by the organized busload. And also that Christians in the West Bank will be allowed to attend, but they must obtain special permits, and it's not clear how many people have been able to obtain those permits. And, Catherine, I can also tell you that many Palestinian Christians, though, are continuing to stage what they call an official protest. There aren't any off declarations here in Manger Square. The tree outside the Church of the Nativity is not being decorated. So instead of decorations, you have signs such as end the occupation, and quote "curfews equal detention camps."
[Callaway:] Wow!
[Wallace:] So, the Palestinians using this to protest what they say has been Israeli occupation Catherine.
[Callaway:] Yes, not the usual sight there. I know a lot of Christians like to travel to that area, to Manger Square. Looking around now, what is the situation? A lot of people?
[Wallace:] Well, right now, most of Manger Square is relatively filled, but it's not clear if many of these are the you know, some of the 10,000 Christians who currently live in Bethlehem. Throughout the day, we'll get a better sense of how many Christians from around the world will be coming here. We do know that Christians from other countries are planning to come, and again, there is this annual procession, so we'll have to see. But I can tell you that many people who own businesses here say that the tourists have stayed away, that Christians have stayed away, and so they say it's going to be a very blue Christmas for them and their families Catherine.
[Callaway:] Kelly Wallace joining us there from Manger Square thank you, Kelly. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.