It was a little past noon, and after 24 hours holed up inside the Bethlehem Star Hotel as heavy fire raged in the streets, we had elected to explore the city during an apparent lull in the fighting. Now, as we walked down Pope Paul VI Street toward Manger Square, we encountered a scene of devastation: smashed windows, bullet-pocked walls, cars crushed by tanks, broken pipes spewing water in all directions and bullet casings littering the ground. And the only sound beside the crunching of glass beneath our feet were car alarms ringing incessantly across the city. Dozens of Israeli tanks had roared down this street on their way into Manger Square yesterday, engaging Palestinian guerrillas in furious fire fights. The shooting had turned what had once been a charming quarter of this landmark Christian city into a scene of destruction–and bloodshed.

“Please, come around this way,” the man, Sami Yacoub Issa Abdeh, beckoned, ushering us through a narrow cobblestone alleyway to the rear entrance of his house and ground-floor grocery store. We walked past wailing women and a display of candy and cigarettes to a tiny bedroom. There we saw them: the bodies of a man and an elderly woman sprawled in the spot where they had been killed by a barrage of Israeli bullets fired through the metal shutters. They made a horrific sight. The man, Sami’s 37-year-old brother, was slouched on a blanket, half his head shot away; a large piece of his brain lay in a metal chair. The woman, Sami’s 64-year-old mother, sprawled on her back beside him in a purple nightgown; she had been shot in the face. More than a dozen bullet holes perforated the cheap plasterboard wall behind them. “They have been lying here for 27 hours,” he told us. “No ambulances have been able to get here.”

For the past two days, Bethlehem’s residents have cowered behind locked and shuttered doors as hundreds of Israeli armored vehicles and thousands of troops sweep through the city in a hunt for Palestinian militants. The latest incursion, being carried out simultaneously with assaults on a half dozen other West Bank cities, is by far the most extensive yet in this Christian pilgrimage site. Tanks and armored personnel carriers roared through the labyrinthine alleys of the old city, shooting at everything that moved; the Israeli Army positioned snipers across the rooftops of centuries-old stone buildings and surrounded the Church of the Nativity, one of Christianity’s holiest sites, where 200 people, including both civilians and fighters, have taken refuge. After two days of often furious fighting, the extent of the casualties remains unknown: Bethlehem has been declared a “closed military zone” by the Israeli government, and journalists have been intimidated, detained–and on several occasions shot at–by Israeli troops. By Tuesday night, most of the shooting in the city had ceased, though the standoff at the Church of the Nativity was still going on.

We had arrived in Bethlehem late on Monday afternoon, expecting the invasion to occur that night. The Israeli military had done nothing to conceal its intentions: at the city’s main entrance just south of Jerusalem, dozens of tanks had amassed throughout the day, and Israeli soldiers disembarked there from buses and private cars, kissing their families goodbye. Just five minutes away in Manger Square, on the other side of the checkpoint, Fatah gunmen milled nervously, some of them wearing full combat gear; I spied a 12-year-old boy carrying a pistol and an old man wrapped in a checked kaffiyeh proudly toting an Enfield rifle, looking like a phantom from the War of 1948. But as darkness fell, the gunmen disappeared. Bethlehem residents gathered for some last-minute stocking up of bread from local bakeries, then hurried home to wait out the coming storm.

Dawn broke in Bethlehem on Tuesday morning with the roar of F-16 fighter jets and the thud of heavy machine-gun fire as Israeli tanks and armored personnel carriers rolled through the streets to seal off every neighborhood. At the Bethlehem Star Hotel, a five-minute walk from Manger Square, a dozen journalists and a bevy of international protesters were sipping tea in the panoramic fifth-floor restaurant, peering out at the armored vehicles rumbling down the street. A shot rang out, and as the window shattered a piece of glass lodged in the neck of an Al-Jazeera correspondent. “Keep down,” shouted a French photographer. “They are shooting anyone they see.”

Indeed, at 7 a.m. downtown Bethlehem was declared a military zone and anyone seen moving on the streets was an open target. In the Star Hotel lobby, the delegation leader tried to contact the U.S. Consulate on his cell phone to arrange the evacuation of his group. But consular officials didn’t deem the situation “serious enough” to warrant an evacuation, and Richard Elias, the blond-haired young hotelier, whose family owns the Star, told the group to prepare for a long stay. “I’ll give you what we have,” he said. “We’ll start with one piece of bread and jam for breakfast. Omelets for lunch, but as you can see we’re running out of food and we’re besieged.”

With a few tanks and an armored bulldozer parked in front of the hotel, automatic weapons fire crackled down the street, and through the barred glass lobby window a dozen Israeli troops could be seen running in the direction of Duheishe refugee camp. Tank shells exploded a few hundred meters away. A pony-tailed reservist walked by the front door, radio antenna waving out of his packs, scanning a military map of the city as a rainstorm blew in and the wind howled through the narrow streets. A few minutes later, Elias received a phone call from his cousin. An elderly man had been found shot dead on a nearby street. “There is a martyr in Bethlehem,” he announced.

Shortly afterward, the electricity failed in our neighborhood, and Richard’s generator went down a few hours later. With a heavy rain clouds hanging over the city, the hotel was plunged into near darkness. Around dusk I felt my way up five flights to the panoramic restaurant again, and looked out over the Old City–a glorious vista of spires and steeples and red-tile roofs married by wisps of smoke. The Omar Mosque on Manger Square was on fire: I later learned that it had gone up in flames during a shootout between Israeli troops and militants. Firefighters had negotiated for three hours with the Israelis to be allowed to come to the scene; then were shot at when they pulled near. By then, the heavy rain had put the fire out.

It wasn’t until the following morning that a group of journalists decided to venture into the streets. Four of us draped ourselves in white flags made from pillowcases and, wearing helmets and combat vests, we set out through crooked alleyways in the direction of Manger Square. But the silence was spooky, the shot-up intersections had the cursed look of war zones everywhere; and the rumble of tank treads moving along nearby streets made us press ourselves against the walls in anxiety. As we neared the old city, we ran straight into a squad of Israeli infantrymen, scanning the rooftops and windows, M-16 rifles swiveling back and forth. They didn’t look pleased to see us. After inspecting our press cards, they ordered us to leave the area–immediately. “Have a nice day,” the commander said. I didn’t need to look at his face to know he was being ironic.