VATICAN CITY — It's been a rough year for the baby Jesus in Italy.

As Christmas was approaching, several schools in the northern Italian region of Veneto decided not to put up the traditional Nativity scene, or "presepio," so as not to offend Muslim students.

Then a school in Como invited students to substitute the word "Jesus" ("Gesu") with "virtue" ("virtu") during the singing of a Christmas carol — again, to avoid offending non-Christians.

In Treviso, an annual school Christmas recital centered on the birth of Jesus was replaced this year by "Little Red Riding Hood," which was deemed more culturally correct.

On Dec. 12, when Pope John Paul II did his annual blessing of "presepio" figurines from his apartment window, it seemed to some that St. Peter's Square was the only place left to openly demonstrate the Christmas spirit.

The new trend toward hiding some of the religious manifestations of Christmas upset Italian church leaders and some Vatican officials. Interfaith sensitivity is one thing, they said, but this was going too far.

"This is a radical exaggeration, and people aren't aware of what they're doing," said Cardinal Camillo Ruini, papal vicar of Rome and head of the Italian bishops' conference.

"They are small episodes in themselves, but the spirit behind them is radically mistaken, and the consequences on our children could be very heavy," Cardinal Ruini said.

But there is already evidence that younger Italian generations are losing touch with the "presepio" tradition. One recent survey of Italian elementary students found that only 26 percent could accurately identify the figures in the Nativity scene and tell the story of Christ's birth.

Some Italian politicians saw the controversy in a political and nationalistic light. It was St. Francis, they said, who invented the "presepio" in the 13th century, and Italians have been embellishing the tradition ever since.

"We live in a community with deep Christian roots, and this sidelining of religion is scandalous. It's a form of reverse racism," said Nicola Molteni, an official of Italy's Northern League party.

In some areas of Italy, however, particularly in neighborhoods with a large immigrant population, the number of non-Christian students is growing quickly. At the school that rearranged the words of the Christmas song, for example, 20 percent of the students were Muslim.

In Rome's Tor Pignattara area, 80 percent of the students are foreigners, and many are Muslim. This year the school decided to hold special celebrations for Ramadan and Christmas.

Elsewhere, the appearance of Santa Claus -- including giant plastic versions outside some major Rome churches -- has lent a secular tone to what has always been a religious season in Italy. One white-bearded Santa even showed up for the pope's blessing in St. Peter's Square, standing next to hundreds of children who held their baby Jesus figurines.

Church and civil leaders in some regions have responded to all this with a counteroffensive aimed at reviving interest in the older traditions. In the Veneto region, authorities have invited schools to enter a new "presepio"-building contest, with prizes worth more than $7,000 going to the biggest and the most beautiful entries.

In other areas, Magi parades have been organized.

At the Vatican, officials inaugurated a major exhibit of prints with a Nativity theme. They range from a 17th-century Chinese woodcut to works by European masters like Rembrandt and Albrecht Durer.

Archbishop Mauro Piacenza, president of the Pontifical Commission for the Cultural Goods of the Church, said the exhibit's importance was religious and artistic.

"These are not just works of art, but also works of faith. And it is the faith which, in turn, produces culture," he said.

Archbishop Piacenza said that from the beginning the "presepio" was more than a folkloric way to represent Christ's birth. It was designed as an occasion for meditation and prayer, he said. The addition of many figures to Nativity scenes reminds viewers that Jesus arrived in the midst of human activity, he said.

Archbishop Piacenza said that as a youth he always wondered why the donkeys were depicted in the manger, when they were never mentioned in any Gospel. He later learned they were added, along with the oxen, to echo the words of the prophet Isaiah: "An ox knows its owner, and an ass its master's manger; but Israel does not know, my people has not understood."

The archbishop also noted that it is common for a "presepio" to include ancient architectural ruins. He said most people don't realize they depict the ruins of the Temple of Peace in Rome, which according to an ancient prediction would collapse only when a virgin gave birth.

According to a marketing study published in December, Italians and foreign tourists continue to buy "presepio" figurines, especially the ones originating in the two famous workshops in Naples.

Unfortunately, the more ancient Nativity figures also attract the attention of thieves. Every year, hand-carved baby Jesus figures are lifted from unguarded "presepios" in Italian churches.

In mid-December, "presepio" devotees received some good news. In an operation called "Divine Infant," police in northern Italy recovered a cache of some 50 statuettes of Jesus that had been stolen over the last 30 years.

This year, they'll be home for Christmas.