Yes, Israel does celebrate Christmas, but in a slightly different way than in other countries. Christmas is a Christian holiday that commemorates the birth of Jesus Christ, and it is a significant holiday in many Christian-majority nations around the world, including Israel. In Israel, Christmas is celebrated as a national holiday, and many people attend church services and participate in other religious and cultural activities. However, there are also many non-Christians in Israel who celebrate Christmas as a secular holiday and enjoy the festive atmosphere and decorations.