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Trump broke with decades of US policy earlier this month by recognising Jerusalem as Israel's capital and declaring he would move the country's embassy from Tel Aviv to the contested city.

Jerusalem is a key issue in the Israeli-Palestinian conflict and the move has caused widespread anger in the region and garnered international condemnation.

Nazareth, known as the Arab capital of Israel, houses over 76,000 Arab Muslims and Christians, and is a focal point of Christmas festivities for the Holy Land.

"We have decided to cancel the traditional Christmas singing and dancing because we are in a time of dispute, because of what Trump has said about Jerusalem," city spokesman Salem Sharara said.

Sharara added that the town market stalls and traditional church services will continue as every year.  

Protests have erupted in the Palestinian territories and along the Gaza border since Trump’s announcement

Eight Palestinians have been killed by Israeli forces since Trump's announcement on 6 December, including four on Friday in one of the bloodiest days in two weeks.

Hundreds have been injured by Israeli military forces during demonstrations.

Protesters in Bethlehem – the birthplace of Jesus – set fire to placards with pictures of the US vice-President Mike Pence on Monday ahead of a scheduled visit to the region.

Christmas trees were dimmed as lights were switched off in Bethlehem and Ramallah, including the Christmas tree in Bethlehem’s Manger Square after Trump’s announcement.

Bethlehem municipality has not yet commented on whether there will be a cut back in this years festivities.