Olive Wood Crafting began in the fourth century AB in the Byzantine rule in the city of Bethlehem, just after the building of the Nativity Church. Church monks taught local residents of Bethlehem how to carve olive wood. This art developed and became the major economy source in Bethlehem and near small cities like Beit Sahour and Beit Jala.after that in the 16th and 17th centuries when Italian and Franciscan artisans taught the residents how to carve. Since then the tradition has been passed on generation by generation.
Today, the art of Olive Wood Crafting continues to be a major source of income for Bethlehem's Palestinian Christian families and is one of the most profitable tourist product in Bethlehem with the main purchasers being Christians Tourists visiting in Christmas time. Olive Wood Carvings include many products such as crosses, Music boxes, picture frames, covers for Holy Bible, candle holders and bases, rosaries and Christmas tree ornaments as well as scenes of the Holy Family and Nativity Sets. Olive wood branches are coming from the nearby villages of Bethlehem.