Go to CNN (title hyperlinked to article) for pictures of the festivities. I originally found this on Right Nation.

Baghdad celebrates first public Christmas amid hope, memories
By Jill Dougherty
CNN
Dec 21, 2008
Excerpt
BAGHDAD, Iraq (CNN) — From a distance, it looks like an apparition: a huge multi-colored hot-air balloon floating in the Baghdad sky, bearing a large poster of Jesus Christ. Below it, an Iraqi flag.

Welcome to the first-ever public Christmas celebration in Baghdad, held Saturday and sponsored by the Iraqi Interior Ministry. Once thought to be infiltrated by death squads, the Ministry now is trying to root out sectarian violence — as well as improve its P.R. image.

The event takes place in a public park in eastern Baghdad, ringed with security checkpoints. Interior Ministry forces deployed on surrounding rooftops peer down at the scene: a Christmas tree decorated with ornaments and tinsel; a red-costumed Santa Claus waving to the crowd, an Iraqi flag draped over his shoulders; a red-and-black-uniformed military band playing stirring martial music, not Christmas carols.

On a large stage, children dressed in costumes representing Iraq’s many ethnic and religious groups — Kurds, Turkmen, Yazidis, Christians, Arab Muslims not defined as Sunni or Shiite — hold their hands aloft and sing “We are building Iraq!” Two young boys, a mini-policeman and a mini-soldier sporting painted-on mustaches, march stiffly and salute.

Even before I can ask Interior Ministry spokesman Major-General Abdul Karim Khalaf a question, he greets me with a big smile. “All Iraqis are Christian today!” he says.

Khalaf says sectarian and ethnic violence killed thousands of Iraqis. “Now that we have crossed that hurdle and destroyed the incubators of terrorism,” he says, “and the security situation is good, we have to go back and strengthen community ties.” READ MORE