The town's economy is largely based on tourism and related industries, such as the manufacture of olive-wood carvings. Agriculture and work in Israel also play a significant role. The town had a prominent role in the Palestinian national "Bethlehem 2000" project, as extensive renovations of touristic sites, hotels and businesses, and historic sites were performed prior to the millennium celebrations. Social and economic sectors have been seriously disrupted since September 2000 due to the events of the Al-Aqsa Intifada.
Civil society activism in Beit Sahour
Beit Sahour is a significant centre of civil society activism and has played a prominent role in the events of the first and second Palestinian Intifadas, with local activists pioneering non-violent resistance techniques.
In 1989, during the first Intifada, the Palestinian resistance urged people to resist paying taxes to Israel. The people of Beit Sahour responded to this call with an unusually organized and citywide tax strike. As a result of the tax strike the Israeli military authorities placed the town under curfew for 45 days and seized goods belonging to citizens in raids.
Israel's occupation military forces had the authority, independent from the rest of Israel's government, to create and enforce taxes in occupied areas. As a result, they would impose taxes on Palestinians as collective punishment measures to discourage the intifada, for instance "the glass tax (for broken windows), the stones tax (for damage done by stones), the missile tax (for Gulf War damage), and a general intifada tax, among others""A Matter of Justice: Tax Resistance in Beit Sahour" Nonviolent Sanctions Albert Einstein Institution, Spring/Summer 1992
Beit Sahour residents have suffered considerable losses due to Israeli land confiscation policies. The controversial Har Homa settlement was built partially on land owned by Beit Sahour residents, as was a nearby bypass road. Life in the town, as in Bethlehem, has also been considerably disrupted by Israeli movement restrictions: Jerusalem, the main social, economic and religious centre of the region, is now inaccessible to most residents, and travel to other parts of the West Bank is impeded and often prevented. The Israeli West Bank barrier now being constructed will further isolate the town from its surroundings.