Palestinian scouts played drums and bagpipes as Christmas celebrations began in Bethlehem yesterday, but many tourists stayed away with tensions still simmering following Washington's recognition of Jerusalem as Israel's capital.

The December 6 announcement by US President Donald Trump unleashed demonstrations and clashes, including in Bethlehem in the Israeli-occupied West Bank where Christians will mark the birth of Jesus in a midnight mass.

On Bethlehem's Manger Square, hundreds of Palestinians and tourists gathered in the cold near a huge nativity scene and Christmas tree to watch the annual scout parade.

They took pictures as a marching band made its way through the square towards the Church of the Nativity, built over the spot where tradition says Mary gave birth to Jesus.

The square usually throngs with tourists on Christmas Eve, but clashes between Palestinian protesters and the Israeli army in the past weeks have kept people away this year.

Twelve Palestinians have been killed since Trump's declaration, including a 19-year-old who died of his wounds yesterday nine days after he was shot during a Gaza protest.

Nahil Banura, a Christian woman from Beit Sahur, a town near Bethlehem, said Trump's decision had made the run-up to Christmas "miserable".

"People are only going out to vent," said the 67-year-old, whose granddaughter wore a Santa Claus hat and clutched a pink balloon.

Perhaps as few as 50,000 Palestinian Christians make up just around two percent of the predominantly Muslim population of the West Bank and east Jerusalem.

Archbishop Pierbattista Pizzaballa, apostolic administrator of the Latin Patriarch of Jerusalem, arrived in Bethlehem after noon and shook hands with local personalities.