The celebrations are a major tourist draw and income source for Nazareth, which is populated primarily by Arab citizens of Israel - two-thirds of whom are Muslims and one-third of whom are Christians, the Times added.
While it was originally reported on Thursday that Nazareth mayor Ali Salam would protest the US' recognition of Jerusalem as Israel's capital by cancelling Christmas celebrations, this policy was later clarified to explain that only "artistic performances on stages" would be eliminated. "The decision has taken away the joy of the holiday, and we will thus cancel the festivities this year". During the holiday season, the city hosts a Christmas market among a number of other celebrations that attract large crowds from around the world.
All Christmas festivities have been halted because of Donald Trump's controversial decision to recognise Jerusalem as the Israeli capital. Nazareth is believed to be Jesus Christ's childhood home, though he was born in Bethlehem.
The Brotherly Covenant, an NGO devoted to incorporating Christians into Israeli society, released a statement condemning the move and stated that cancelling Christmas in Nazareth would hinder chances at co-existence.
The town announced it will cut back on its Christmas festivities, claiming Donald Trump has leached all the joy out of the holiday after his Jerusalem decision.
"Today we finally acknowledge the obvious: that Jerusalem is Israel's capital", Mr Trump said in a speech in the White House last week.
It comes amid a backlash across the region after Mr Trump announced he would begin the process of shifting the United States embassy in Israel to Jerusalem, after symbolically recognising it as the capital of the country.
The move was hailed by Prime Minister Benjamin Netanyahu and by leaders across much of the Israeli political spectrum, and condemned by the vast majority of the worldwide community.
Following the 1967 Middle East war, Israel declared Jerusalem as its capital, according to express.co.uk, but the claim is not recognised by the worldwide community or Palestinians.
Following the 1967 Middle East war, Israel declared Jerusalem as its capital. According to the New Testament, Jesus also grew up in the town.
But the militant Palestinian group Hamas said Trump's decision "opens the gates of hell".