The city of Bethlehem passes from Israeli to Palestinian control.

The Palestinian National Authority (PA or PNA; Arabic: as-Sula al-Waanya al-Filasnya), commonly known as the Palestinian Authority and officially the State of Palestine, is the Fatah-controlled government body that exercises partial civil control over West Bank areas "A" and "B" as a consequence of the 19931995 Oslo Accords. The Palestinian Authority controlled the Gaza Strip prior to the Palestinian elections of 2006 and the subsequent Gaza conflict between the Fatah and Hamas parties, when it lost control to Hamas; the PA continues to claim the Gaza Strip, although Hamas exercises de facto control. Since January 2013, the Palestinian Authority has used the name "State of Palestine" on official documents, although the United Nations continues to recognize the Palestinian Liberation Organization (PLO) as the "representative of the Palestinian people".The Palestinian Authority was formed in 1994, pursuant to the GazaJericho Agreement between the PLO and the government of Israel, and was intended to be a five-year interim body. Further negotiations were then meant to take place between the two parties regarding its final status. According to the Oslo Accords, the Palestinian Authority was designated to have exclusive control over both security-related and civilian issues in Palestinian urban areas (referred to as "Area A") and only civilian control over Palestinian rural areas ("Area B"). The remainder of the territories, including Israeli settlements, the Jordan Valley region and bypass roads between Palestinian communities, were to remain under Israeli control ("Area C"). East Jerusalem was excluded from the Accords. Negotiations with several Israeli governments had resulted in the Authority gaining further control of some areas, but control was then lost in some areas when the Israel Defense Forces (IDF) retook several strategic positions during the Second ("Al-Aqsa") Intifada. In 2005, after the Second Intifada, Israel withdrew unilaterally from its settlements in the Gaza Strip, thereby expanding Palestinian Authority control to the entire strip while Israel continued to control the crossing points, airspace, and the waters of the Gaza Strip's coast.In the Palestinian legislative elections on 25 January 2006, Hamas emerged victorious and nominated Ismail Haniyeh as the Authority's Prime Minister. However, the national unity Palestinian government effectively collapsed, when a violent conflict between Hamas and Fatah erupted, mainly in the Gaza Strip. After the Gaza Strip was taken over by Hamas on 14 June 2007, the Authority's Chairman Mahmoud Abbas dismissed the Hamas-led unity government and appointed Salam Fayyad as Prime Minister, dismissing Haniyeh. The move wasn't recognized by Hamas, thus resulting in two separate administrations the Fatah-led Palestinian Authority in the West Bank and a rival Hamas government in the Gaza Strip. The reconciliation process to unite the Palestinian governments achieved some progress over the years, but had failed to produce a re-unification.

The Palestinian Authority received financial assistance from the European Union and the United States (approximately US$1 billion combined in 2005). All direct aid was suspended on 7 April 2006, as a result of the Hamas victory in parliamentary elections. Shortly thereafter, aid payments resumed, but were channeled directly to the offices of Mahmoud Abbas in the West Bank. Since 9 January 2009, when Mahmoud Abbas' term as president was supposed to have ended and elections were to have been called, Hamas supporters and many in the Gaza Strip have withdrawn recognition for his presidency and instead consider Aziz Dweik, the speaker of the Palestinian Legislative Council, to be the acting president until new elections can be held.The State of Palestine has become recognized by 138 nations and since November 2012, the United Nations voted to recognize the State of Palestine as a non-member UN observer state. The Palestinian Authority is an authoritarian regime that has not held elections in over 15 years; it has been criticized for human rights abuses, including cracking down on journalists, human rights activists, and dissent against its rule.

Bethlehem (; Arabic: بيت لحم Bayt Laḥm, "House of Meat"; Hebrew: בֵּית לֶחֶם Bet Leḥem, Hebrew pronunciation: [bet ˈleχem], "House of Bread"; Ancient Greek: Βηθλεέμ Greek pronunciation: [bɛːtʰle.ém]; Latin: Bethleem; initially named after Canaanite fertility god Laḫmu) is a city in the central West Bank, Palestine, about 10 km (6.2 miles) south of Jerusalem. Its population is approximately 25,000, and it is the capital of the Bethlehem Governorate. The economy is primarily tourist-driven, peaking during the Christmas season, when Christians make pilgrimage to the Church of the Nativity. The important holy site of Rachel's Tomb is at the northern entrance of Bethlehem, though not freely accessible to the city's own inhabitants and in general Palestinians living in the occupied West Bank due to the Israeli West Bank barrier.

The earliest known mention of Bethlehem was in the Amarna correspondence of 1350–1330 BCE when the town was inhabited by the Canaanites. The Hebrew Bible, which says that the city of Bethlehem was built up as a fortified city by Rehoboam, identifies it as the city David was from and where he was anointed as the king of Israel. The Gospels of Matthew and Luke identify Bethlehem as the birthplace of Jesus. Bethlehem was destroyed by the Emperor Hadrian during the second-century Bar Kokhba revolt; its rebuilding was promoted by Empress Helena, mother of Constantine the Great, who commissioned the building of its great Church of the Nativity in 327 CE. The church was badly damaged by the Samaritans, who sacked it during a revolt in 529, but was rebuilt a century later by Emperor Justinian I.

Bethlehem became part of Jund Filastin following the Muslim conquest in 637. Muslim rule continued in Bethlehem until its conquest in 1099 by a crusading army, who replaced the town's Greek Orthodox clergy with a Latin one. In the mid-13th century, the Mamluks demolished the city's walls, which were subsequently rebuilt under the Ottomans in the early 16th century. Control of Bethlehem passed from the Ottomans to the British at the end of World War I. Bethlehem came under Jordanian rule during the 1948 Arab-Israeli War and was later captured by Israel in the 1967 Six-Day War. Since the 1995 Oslo Accords, Bethlehem has been administered by the Palestinian Authority.Following an influx of refugees as a result of Israeli advances in the 1967 war, Bethlehem has a Muslim majority, but is still home to a significant Palestinian Christian community. It is now encircled and encroached upon by dozens of Israeli settlements and the Israeli West Bank barrier, which separates both Muslim and Christian communities from their land and livelihoods, and sees a steady exodus from both communities.