The tradition of making the handicrafts began in the 4th century CE under Byzantine rule in Bethlehem — which continues to be the main city that produces the craft — following the construction of the Chruch of the Nativity. Greek Orthodox monks taught local residents how to carve olive wood. The art developed and became a major industry in Bethlehem in the 16th and 17th centuries when Franciscan and Italian artisans on pilgrimage to the area — by now under the rule of the Ottoman Turks — taught the residents how to carve. Since then the tradition has been passed on generation by generation and is dominated by the descendants of the original local carvers.

Today, the art continues to be a major source of income for Bethlehem's Palestinian Christians residents and is the most profitable tourist product in the city with the main purchasers being Christian pilgrims visiting in Christmastime. Olive wood is carved into crosses, boxes, picture frames, covers for historical and old books, candle holders, rosaries, urns, vases and Christmas ornaments as well as scenes of the Holy Family Olive wood branches are supplied by olive groves in nearby villages as well as from the Nablus and Tulkarm region, despite the difficulty of transportation in the Westbank. (source: Wikipedia)