You would think, with 2,000 years to get ready, Bethlehem, the birthplace of Jesus, would be well prepared. Not so, but God knows they are trying.

"The electricity is gone again," shouted the souvenir-shop owner, "welcome to Bethlehem 2000". Johnny's souvenir shop and the Holy Manger stores were plunged into darkness.

Power cuts are a regular occurrence in Bethlehem. The latest culprit was not the hundreds of Arab workers busily uprooting streets and rebuilding pavements by hand, but the angelic voices of the Vienna Boys' Choir.

They were due to open the millennium celebrations in Manger Square that evening, but their sound check brought down the already overstretched power system. At times there may be no light, but there is always plenty of life, and definitely a great warmth.

Above the noise of the chisels, grinders and jackhammers in Manger Square you could hear children playing, laughing, chasing, because the square is more a children's playground than a solemn place of worship. It is flat out for the millennium, but it is being done at such speed and panic that one could be forgiven for believing that they only got the good news a few weeks ago.

In fairness, the lack of preparation is probably a good reflection of the relaxed atmosphere in this town six miles from Jerusalem.

Manger Square, Nativity Street, Star Street and Milk Grotto Way are not overrun with tacky souvenir shops, hawkers or beggars. There are no queues, and security is relaxed.

Bethlehem, with a population of 38,000, is mainly Muslim. But in truth that causes few problems. Muslims and Christians work together, in so far as there is work available, mainly in the tourist industry in an otherwise poor area.

But the religious breakdown of the town means there is almost an air of lack of interest in the thousands of faithful who come to worship at the source of our modern world, the cradle of Christianity.

Bethlehemites working in Jerusalem must get through the heavily fortified Israeli army checkpoint at the top of Manger Street just past Rachel's tomb. The main function of the checkpoint is not to stop those going into the birthplace of Our Lord - little worry here, it seems, about the dreaded doomsday cults - but to check the papers of the Bethlehemites.

No opportunity is lost to remind people of the comparison between the treatment of the Palestinian people today and the harassment of Bethlehemites 2,000 years ago when Herod tried to find the messiah predicted in the Old Testament who would come from the City of David, Bethlehem.

The introduction to the open-air concert by the Vienna Boys' Choir was peppered with attacks on Israel and calls for an end to "the persecution of the Palestinian people". The 12-year-olds from Austria stood silent and freezing.

Bethlehem is now in a Palestinian authority area, the most famous town under the control of Mr Yasser Arafat. And it will, in effect, become the capital of the emergent state for the next year. Mr Arafat has already invited many world leaders, including Mr Boris Yeltsin, to visit The Church of the Nativity in early January.

The refurbishment of Bethlehem is being paid for by many governments. The new refuse truck reversing into Manger Square proudly carries the logo of the Westfalen local authority in Germany; the repaving of Milk Grotto Street is being paid for by the Greek government; the new community centre comes courtesy of the people of South Korea; while the fire engine on standby during the outdoor performance of the Vienna Boys' Choir came from Saudi Arabia.

I don't know what was more bizarre, the fire truck from Saudi, or the fact that the cherubic boys from Austria singing Christmas carols were in danger of setting anything alight, apart from emotions. Silent Night, O Little Town Of Bethlehem and Away In A Manger have never sounded as well as they did in the spot that inspired them.

While many of the historical facts about Jesus may be open to question - differing even in the four gospels - few dispute that the cave underneath the Church of the Nativity in Manger Square is the birthplace of Jesus Christ.

Father Jerome Murphy O'Connor, a Dominican from Cork, has been in the Holy Land for 36 years and is the authority on the historical Jesus. While he gently challenges many historical aspects of the Nativity story, using evidence like a biblical detective, he is 97 per cent sure this is the birthplace of Jesus.

The entrance to the Church of the Nativity is no bigger than a window. It leads to a spacious, open, cool and dark church. It looks distinctly eastern, with icons, candelabra and no seats.

At the side of the altar, 15 steps lead down to the "stable" of Bethlehem - but it is a cave. On one side, the star of Bethlehem marks the actual site of the birth, the manger is a few steps down again in the cave. Little doubt that this was a safe, warm and dry spot in which to give birth.

And for the pilgrims it is clear that seeing is believing. For me Bethlehem had the serenity and dignity of the grotto in Lourdes and very little of the tackiness and money-making one associates with the streets around that same grotto in the south of France.

Back through the checkpoint and into Jerusalem, where seeing is also believing. The main belief one leaves with is that this is still a divided land at war.

In a restaurant one evening in Ben Yehuda Street I counted 60 people of whom the youngest 53 sported Uzi sub-machineguns.

It seems that every Jewish young man over 17, sports an Uzi with all the nonchalance of a schoolbag, a reminder that 2,000 years after the birth of Christ the Holy Land is still hopelessly divided.

Bethlehem 2000AD will be broadcast on RTE Radio 1 next Friday, Christmas Eve, at 1.45 p.m.