17 December, 2017
Mr Trump announced the move last week, reversing decades of U.S. policy and recognised Jerusalem as the capital of Israel, jeopardising Middle East peace efforts and upsetting the Arab world and Western allies alike.
Newsweek reports that the cancellation will impact the local economy "severely", as tens of thousands of people usually travel to the town during the Christmas season for the festivities.
"After the announcement of US President Donald Trump, we saw it is as appropriate to cancel all the celebrations because we are part of one single people", the mayor of Nazareth Ali Sallam said in a statement.
The Muslim mayor of Nazareth - the town where Jesus grew up - has announced he is cancelling Christmas events over U.S. President Donald Trump's controversial decision to recognize Jerusalem as the capital of Israel. "The decision has taken away the joy of the holiday, and we will cancel the festivities this year", he said.
He did not mention Trump's Jerusalem announcement in these later remarks. Still, Nazareth is an important point on the Christian Christmas pilgrimage.
Jerusalem holds significance for three major world religions - Islam, Judaism and Christianity. Half of Jerusalem has been envisioned as the future capital of a Palestinian state, if a two-state solution is reached between Israel and Palestine. On Wednesday, the Organization of Islamic Cooperation, an umbrella group of 57 Muslim countries, met in Istanbul and issued a communiqué denouncing Trump's decision. Trump stressed that he was not specifying the boundaries of Israeli sovereignty in the city, and called for no change in the status quo at the city's holy sites.More news: Clemson, Alabama matchup a 'home run' for Allstate Sugar Bowl
Many Israeli leaders support Trump's decision, claiming that Jerusalem is the undivided capital of Israel.
The giant Basilica of the Annunciation is built on the place where many believe Jesus' mother Mary's house stood and where the angel visited her and told her she would bear the Messiah.
Nazareth is Israel's largest Arab city, with a population of more than 75,000.
His decision sparked widespread violence in Israel 24 hours later in a "day of rage" over the move.
The procession and lighting of the tree are still scheduled, according to the mayor.
Nazareth is made up of mostly Muslims and Christians and located in northern Israel.