Christmas in Bethlehem (Bethlehem, Carmarthenshire, that is)

Away on a playmat, no crib for a bed, the little lad Emyr lays down his sweet head. The stars in the bright sky look down on a baby in Bethlehem again this Christmas ... but the shepherds are more likely to be watching telly by night than their flocks.

The sheep are safe enough because this Bethlehem is a tiny farming village in Carmarthenshire, west Wales, not the one on the West Bank. There are only 16 settlements of that name on the planet, and the one where little Emyr McCrae Jones lies gurgling is among the smallest: just a cluster of homes and surrounding farms. It is, however, the second most famous.

Like Mary and Joseph, people come to this Bethlehem from far away not for a census, but to post their letters in the village at Christmas. "We offer a special hand stamp," says Peter Edkins in the post office. The postmark shows an angel and a harp, with greetings in English and Welsh, but crucially it also carries the name of the village. That gets people excited, apparently."We get a lot of letters from people abroad, enclosing letters they want posted. Last year we did about 30,000."

Visitors also come in person to the post office, which is usually part-time but keeps going through December to meet the demand, says Mr Edkins. "There were people from Tasmania this year."

The two Bethlehems have a rolling landscape in common: the original in "the hill country of Judea", the Welsh one on the edge of the Brecon Beacons national park. But there is, of course, no huge great wall around this place like the one that encloses the troubled West Bank town. It was only a frozen and closed road that denied access to the village for a while last week. Instead of angels shining over the old white cottage where the baby lays, on the side of the misty River Tywy flood plain there are red kites riding the thermals on their outstretched wings.

Angelic voices, though, the Welsh can provide aplenty: last night the post office, which is also the community hall, was packed for a carol service; the chapel that gave the village its name will have the manger out for a service tonight; and villagers will sing again when no wiser a man than Keith Chegwin broadcasts from here on Christmas Eve. The 200 or so natives of the Welsh Bethlehem are used to such fuss.

They have no Church of the Nativity, but Emyr is not the only baby in the village. A younger boy who came home on Friday is not yet receiving visitors. Emyr does so from his octopus playmat, in a blue and white hooped romper suit rather than swaddling clothes. No crying he makes, but rather a contented sound. He's not a newborn but the Nativity is a bit hazy about dates too. Baby Jesus may have been Toddler Jesus by the time the Three Wise Men (or kings or astrologers) turned up (if they did at all).

It is, however, a matter of historical record that Emyr was born to Flora and Huw McCrae Jones in September. Asked if it was a virgin birth, the mother just laughs at the stupid question, and rightly so.

Flora and Huw are both 34 years old. She is on maternity leave from a children's charity and he is a care worker. Like Joseph and Mary they came from a distant place to be in Bethlehem: Cardiff, in fact. "We both enjoy walking," says Emyr's mother, "and we found this place while we were in the countryside. It had a fantastic view of Carn Goch, the mountain that rises up behind the house, and there were lots of red kites circling in the sky." Carn Goch also has the remains of an iron age fort, and a monument to the first Plaid Cymru MP, Gwynfor Evans.

"People here were very welcoming right from the start," says Mrs McCrae Jones, who is taking Welsh lessons. Her husband Huw speaks the language, as do half the locals. The village was known by a Welsh name until it was rechristened after the chapel built here during the 1800s. The change wasn't officially made by the post office until the 1920s. So why do it? "They were English speaking and probably couldn't say Dyffryn Ceidrich!" says Marian Davies with a glint in her eye.

Bethlehem-born, she is delighted by the attention the village gets and the number of younger people who have come to live here in recent years. A software writer, a potter, a food consultant and a couple of graphic designers have joined the sheep and cattle farmers. "I think the man at the post office saw it as a good marketing opportunity," says Vickie Lawday, a social care worker. "Very forward thinking."

Emyr will spend his first Christmas at home. "I expect that at this stage he will be more interested in the wrapping," says Mrs McCrae Jones. She describes herself as "not a particularly religious person" but won't be drawn further. Some would say Emyr had been born in to a world far more troubled than it was 2,000 years ago, but he is naturally oblivious to all that. "He is a very contented baby," she says. "He has just learned to blow raspberries. That's his new thing." How else can a baby boy say Happy Christmas? Or, as the lights burning bright in the town just across the valley say in Welsh, "Nadolig Llawen".

Meanwhile, back in the original...

By Eric Silver in Bethlehem, West Bank

After seven lean intifada years, Joseph Canavati, owner of the modern Alexander Hotel on Manger Street, the serpentine main road to the Church of the Nativity, is dusting off his "No Vacancies" sign. The pilgrims are coming back.

"This is the best year we've had since the uprising," he beamed. "There are peace talks. There's no violence in the Bethlehem area, no violence in Jerusalem. Our business depends on tranquillity. If there is no violence, there is business."

The guests for his 44 rooms come from the US, Italy, Lithuania and South Korea. All 2,000 beds in Bethlehem hotels and hostels are booked for Christmas for the first time since 2000. Victor Batarseh, the West Bank city's Roman Catholic mayor, expects 40,000 pilgrims to visit the birthplace of Jesus for the holiday.

Despite Israel's concrete security wall, there is renewed buoyancy in the streets: more coloured lights and decorated trees. The roads, once ravaged by Israeli shells, are repaired. The Muslim feast of Eid shades into Christmas this year, so every one of Bethlehem's 32,000 residents has something to celebrate.

Israel is trying to help. "We all share the same economic interest," said Shaul Tzemach, director-general of the Tourism Ministry, which logged a million Christian visitors to the Holy Land in 2007. Procedures have been streamlined for pilgrims at checkpoints between Bethlehem and Jerusalem.

The mayor said the number of visitors to Bethlehem was back to 60 or 70 per cent of pre-intifada trade. Unemployment is down from 60 per cent a year ago to 45 per cent now. But the recovery is relative and fragile. Thousands of labourers who used to work in Jerusalem are barred from entering Israel, though Israel is allowing Palestinian Christians and Muslims to visit relatives across the de facto border for their holidays.

The pilgrims are coming, but the Christians are leaving. Before Israel's creation in 1948, 92 per cent of the city's population was Christian. The mayor puts the current figure at 35 per cent.

Samir Qumsieh, who runs a private Christian TV station, said: "In 15 years you will not find Christians here." Three of his four brothers have left. He blames the exodus on Israel's occupation, "internal problems" (namely, militant Islam) and the fact that "there is no life here".

Across the world in search of a little town

Spare a thought for any latter-day wise men seeking Bethlehem the day after tomorrow. Their search might take them to New Zealand, South Africa, four in Europe and to no fewer than nine places in the US. All have little towns called Bethlehem 14 of them sharing the name of Jesus's birthplace in the West Bank and the UK's own little town in Camarthenshire.

1. Connecticut, US

People from all over the world visit to see a more traditional Christmas, said Judith Grimm of the Church of the Nativity. "We currently have eight to 10 inches of snow on ground, so it's feeling very Christmassy. We get quite a few people coming to visit at this time of year and last year a gentleman from the 'real' Bethlehem came to see us."

2. Co Westmeath, Ireland

Named after a ruined convent and home to just two families, but people still visit in tribute to the nuns who named the area.

3. Florida, US

Bethlehem has a religious Christmas, says resident Mary Harrison. "There's a large country church that looks out of character because it's such a rural area. They do a great play for the area. It is religious here, It's the bottom end of the Bible Belt."

4. Free State, South Africa

Hot summers also define Christmas there according to Andre Odendaal, who runs a guesthouse. "We normally have a bry [barbecue] with beef and chicken, and pork," he said. "It's about 28-30C here, but we still have someone dressed up as Santa for the kids."

5. Georgia, US

Common to most Bethlehems is a post office, with disgruntled postal workers. Kim Sedante, who works in the Bethlehem Post Office describes it as "a nightmare". "There are so many Christmas cards: about 4,000 a day. Bethlehem's only got a population of about 800."

6. Indiana, US

Indiana's own Bethlehem, despite being the smallest settlement in America to carry the name, still has a post office that people from out of town visit for the postmark. Not bad for a town that is named after the city in Pennsylvania, rather than the original in the Middle East.

7. The Netherlands

Consists of just two farmhouses and a destroyed monastery. Arie Jan de Jong lives there. "People of the nearest village, Rottum, go walking on one of the evenings before Christmas to the stables in Bethlehem," he said. "They meet each other and have some drinks, and afterwards the visitors walk with flames in their hands back to the old church in Rottum, where the old monastery was."

8. New Hampshire, US

Barbara Palmer of the Bethlehem Christian Center said their Christmas is more sombre. "We light a memory tree in the centre of town. People pay for a light on the tree, either in memory of a loved one who has died or somebody serving overseas in the military."

9. New York, US

Named after a local miller rather than the historical carpenter. The 31,000 people who live there have a pretty uneventful Yuletide. "We don't make a big deal of it," says Michael Farley at Bethlehem Public Library. Local legend has it that the town is named after Bratt Andriessen, the town's first permanent resident. He supplied everybody with flour to make bread, hence the name Bethlehem, which in Hebrew means "house of bread".

10. North Carolina, US

Features one of the most unusual Christmas scenes, according to Pam Miller of yet another Bethlehem Post Office. "There's an organisation that creates a Bethlehem scene like back in Bible times, but it's a drive-through," she said. "Each church takes a little house and develops it as a carpenter setting, or a stable."

11. Pennsylvania, US

This town has fully grasped the name's commercial possibilities, including having a Christmas star on show all year round. Marsha Fritz, who works for the town's tourist board, said: "Thousands of tourists come to town, and all houses put a single candle in the window. The festivities are so much a part of the town's identity, I don't think anyone would have the nerve to admit that they didn't like Christmas!"

12. Switzerland

For which the Swiss Post Service makes a stamp every year.

13. Tauranga, New Zealand

Ellen Bernstein is less impressed with their hot Christmas. "Perhaps the hardware store will have white pretend-snow spray on its window to remind people that half a world away it is snowing."

14. West Virginia, US

A donor from Missouri gives books to the school's library every Christmas, purely because of the town's name.

Andrew Mickel