Vera Baboun was 24 years old when she first realized that her hometown was truly different from other cities in the world.

Her childhood in Bethlehem had seemed normal, even idyllic. Born in 1963, Baboun attended a Christian school, sang in the church choir, and played tennis. Each December, she would watch the city’s Christmas-tree lighting. As a Girl Scout, she volunteered with the annual procession of the patriarchs, an Orthodox Christian tradition that occurs a few days before Christmas each year. She married young, in her early 20s.

But in 1987, tensions in Palestine exploded in what became known as the First Intifada, an uprising against Israeli control over parts of the territories. That was when Baboun first experienced the meaning of occupation in a deeply personal way. Her husband was detained in 1990 as part of the political resistance. His health deteriorated, but he remained in detention until 1993. In 2000, Baboun told me, the Israeli army demolished his place of work, part of a punitive practice targeting Palestinians that the U.S.-based NGO Human Rights Watch has condemned.     

Now, as mayor of Bethlehem, Baboun must contend with the duality at the heart of the city’s governance. “What does it mean to be the mayor of a city of Bethlehem with its two identities?” Baboun asked during a talk given at the Washington, D.C.-based Middle East Institute (MEI) in 2015. It is both a contested city and a city of peace.

For Baboun, her job means supporting and promoting Bethlehem’s religious and cultural heritage, while struggling within an imposed system to improve the lives of the city residents who depend on her. To that end, she has worked to raise Bethlehem’s international profile. Under her watch, UNESCO recognized Bethlehem’s Church of the Nativity as a World Heritage Site. She also promotes religious activities within the city. Each year, she oversees the tree-lighting ceremony, and leads a prayer for those who attend. “We have a huge tree, 18 meters high, and more than 10,000 attend,” Baboun told me in November on a visit to Washington, D.C., where she’d come to accept an award from MEI for her work to create jobs amid high unemployment, build infrastructure, improve services, and promote tourism. The lighting ceremony features a countdown, much like New Year’s Eve in Time Square. “When we come to the number one, the bells of the nativity church ring, and there are fireworks,” she said.

But the merriment obscures the difficulties of life in Bethlehem. “What’s the difference between us and other cities in the world?” Baboun said. “As long as the occupation exists, even development is jeopardized.”

The 1993 Oslo Accords, under which Palestinian and Israeli leaders recognized each other formally for the first time, and laid out a path to eventual peace, divided Palestinian land into three sectors: Area A was under full control of the Palestinian Authority, Area B had combined Israeli and Palestinian administration, and in Area C, both security and administration fell to Israel. Much of greater Bethlehem falls into Area C. This is in part because of Rachel’s tomb, where one of the legendary matriarchs of the Jewish nation is believed to be buried in the heart of the city, and Israel wanted to guarantee safe passage for Jewish pilgrims.

But Israeli administrative control of Bethlehem means that many regular municipal activities must be cleared through the Israeli bureaucracy. “At every step, you need the permit from the Israelis to develop your own territory, your own 1967 land, your own jurisdiction,” Baboun told me, referring to the boundaries created after the 1967 Arab-Israeli War. “I feel as if I am an authority with no authority,” she added.

The permits Baboun spoke of apply to residential homes, public amenities, and construction related to natural resources or historical sites. For Palestinians who own land in Area C, “all building and planning licenses have to be approved by Israel,” Leila Sansour, filmmaker and founder of Open Bethlehem, a Bethlehem-based non-profit organization that opposes the security barrier and advocates a more open city, told me. “And getting these permits is extremely difficult.” The Israeli organization Peace Now found that between 2000 and 2007, just 6 percent of Palestinian requests for building permits in Area C were approved. Houses built without permits may be subject to demolition. As a result, many families and small businesses cannot develop land that they legally own. They can’t sell it, either: No one wants to buy land that can’t be used.

Sansour is intimately familiar with the burden the permit system imposes; her family owns a piece of land in Area C. “While we would have liked to use it for a number of projects, Israel has not been granting any licenses in this area,” she told me. The situation her family faces, replicated across much of Bethlehem and the rest of Palestine, has depressed the region’s much-needed growth. According to a September 2016 World Bank report, “Israeli restrictions remain the main constraint to Palestinian economic competitiveness and have pushed private investment levels to amongst the lowest in the world, particularly the ones on Area C.”

“It’s a lose-lose situation for everybody,” Eran Etzion, a former head of policy planning at Israel's Ministry of Foreign Affairs told me in a phone interview. Oslo, he pointed out, was designed to end in 1999, to be replaced by a negotiated permanent agreement and the creation of a Palestinian state. But that didn’t happen due to a range of factors, including political opposition, said Etzion, who was involved in the 1995 negotiations. “No one expected at the time that the arrangements would last so long.” That temporary set up has extended an additional 17 years past its intended expiration date, leaving Bethlehem and its residents struggling.

Restrictive policies also mean that Bethlehemites have a tough time telling their own stories to the world through tourism. Tourism is central to Bethlehem’s economy: About 20 percent of employed city residents work in tourism, and in 2014 alone, it received about 4 million visitors. Israel permits Christian pilgrims from around the world to visit the city’s holy sites, including the Church of the Nativity.

But many tourists who visit Bethlehem arrange their trips through group tours organized by Israeli tourism agencies. “Israeli tourism agencies take them to Bethlehem, they show them the church … and then they leave,” Noura Erakat, a human rights attorney and assistant professor at George Mason University in Virginia, told me. Tourists often don’t have the chance to walk through normal Palestinian neighborhoods, visit refugee camps, or chat with locals. “There is a story that Palestinian Christians want to tell,” Erakat added. “But their stories are not being told as they should.”

The Second Intifada, which lasted from 2000 to 2005, altered daily life in Bethlehem even further. In those years, hundreds of Israeli civilians died in terrorist attacks, and thousands of Palestinians were killed by Israeli security forces. To stem the flow of attackers, Israel constructed a 440-mile long barrier dividing Israeli territory from the West Bank. It fulfilled its purpose: Terrorist attacks inside Israel fell. But the wall isolated Palestine from the outside world, and at times divided villages, neighborhoods, and even families. Many Palestinians also feel that the structure is a form of racial segregation.

“Bethlehem was always viewed as a different category, because it was not viewed as a militant area,” David Makovsky, director of the Project on the Middle East Peace Process at the Washington Institute for Near East Policy in D.C., told me. But that changed after the Second Intifada. “There were suicide bombers that came from adjacent areas.” The wall stopped the suicide bombers. But to Bethlehemites, it felt like military occupation.

The wall has limited the religious observance of Bethlehem residents. “We used to go and pray in Jerusalem during Easter,” Baboun told me. “For Christians, we would go to the Church of the Holy Sepulchre; for my Muslim Palestinian citizens, the Aqsa Mosque,” she said, referring to two famous holy sites in Jerusalem. Now it has become far more difficult for worshippers from Bethlehem to attend services in Jerusalem.

The economic effects are devastating as well. The city’s economy has stagnated, and development has stalled as travel to and from Jerusalem has grown arduous. According to the Bethlehem city government website, unemployment there has reached 27 percent. “Bethlehem used to be much more a center of commerce. But it has become increasingly cut off from the rest of the world,” Erakat told me. “There is constant economic strangulation. All lifelines to Jerusalem have essentially been cut off.”

But Bethlehem’s problems also have sources closer to home. The Palestinian Authority is plagued by corruption and incompetence. In 2006, according to its own attorney general, government officials pilfered as much as $700 million. Documents leaked in 2015 purported to show that one official had asked Bahrain for $4 million to build an expensive private residence.

One notable exception was Salam Fayyad, who served as prime minister from 2007 until his resignation in 2013. He placed great emphasis on institution-building, rooted out corruption, built infrastructure, and improved the Palestinian security forces. The economy grew, and the international community applauded his efforts. But leaders have since let such efforts lie fallow, leaving mayors once again on their own. Extremism, while traditionally not a major force in Bethlehem, also creates pressure throughout Palestine and contributes to factional infighting.

The constant limbo makes good governance elusive. “Until you have a deal that gives dignity to both,” Makovsky said, “whatever progress there is on the ground won’t be locked in. Things won’t be stable.”

For now, residents of Bethlehem rely mostly on their own resilience to create lives for themselves. And, sometimes, on prayer. When I asked Baboun what she prays for each year during the tree-lighting ceremony, tears came to her eyes. “Every year,” she told me, “I pray [to] God that next year when I light the tree, I will say, ‘Thank you God for achieving peace in our part of the world.’ Every year, I wish and I dream to say ‘Thank you God.’”

“For me, peace is the world.”