The tradition of making the handcraft began in the 4th century under the Byzantine rule in Bethlehem — which continues to be the main city that produces the craft — following the construction of the Church of the Nativity. Greek Orthodox monks taught local residents how to carve olive wood. The art developed and became a major industry in Bethlehem and nearby towns like Beit Sahour and Beit Jala in the 16th and 17th centuries when Italian and Franciscan artisans on a pilgrimage to the area — by now under the rule of the Ottomans — taught the residents how to carve. Since then the tradition has been passed on from generation to generation and is dominated by the descendants of the original local carvers.
Today, the art continues to be a major source of income for Palestinian Christian families residing in Bethlehem and is the most profitable tourist industry in the city with the main purchasers being Christian pilgrims visiting the Holy Land.
Olive wood is carved into crosses, boxes, picture frames, covers for Bibles, 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 West Bank.