Romanes eunt domus

Jeremy Harding in Bethlehem

Last week, the Palestine Festival of Literature organised a discussion about travel and writing at the Dar Annadwa cultural centre in Bethlehem. One of Palfest's star guests, touring the West Bank and East Jersualem, was Michael Palin, whose early glories, before his reinvention as a traveller, were much on people's minds. He spoke well about growing up in Sheffield and cultivating a passion for Hemingway, but the audience was delighted when someone suggested that living under Israeli occupation was a bit like being in the Terry Gilliam movie Brazil. As the panellists stood up and tidied their books, a young Palestinian in the seat in front of me said she couldn't believe we were all with Palin in Bethlehem – Bethlehem! – and no one had thought to ask about Monty Python's Life of Brian. But with two other writers on the stage, there'd been a lot of ground to cover.

The Palfest way is to hold events in the evening and get the writers out and about during the day. Since it's very difficult, often impossible, for Palestinians to circulate in the West Bank or go to and from Jerusalem, the festival participants do the moving, and negotiate the many checkpoints. The Gilo checkpoint, through which you pass to enter or leave Bethlehem, is a grim pedestrian rat-run, flanked by a large rectangle of asphalt, bare as a coach park at a British seaside resort in February. The bus dropped us at the entrance, drove around and picked us up on the other side, after Israeli security had processed us. There are about a dozen turnstiles but few are manned, which makes for drastic queues from three to six in the morning, when hundreds of Palestinian workers want to get into Jerusalem. The Pope's schedule in May spared him the sight of the Bethlehem apartheid rush hour.

My memories of the town twenty years ago – the anniversary of the first intifada – are of a sombre place, menacing, cold and curfewed, yet the structural grip of the occupation is now far tighter. The separation wall is the key. The towers and cameras posted along its length give the Israeli army a thorough hold on Aida camp, where 4700 refugees are housed; children who once walked across a nearby patch of open ground to school in the camp have had their access cut off by it; and it's turned one edge of Bethlehem into a concrete vista where the enormity of their imprisonment confronts residents every day as symbol and reality.

People have been scrawling on the wall for a while. Banksy, who came to Bethlehem in 2007, is the best known, though he didn't stick to the wall. A minute's walk from the Jacir Palace (now the Intercontinental Hotel) there's a witty, powerful stencil of a little girl frisking a soldier. Other artists and agitproppers may not have an international reputation but all their efforts, from good to mediocre and worse, break up the repressive monotony of the wall. Even the simplest tags seem to make a point: Kilroy was here and so is Palestine.

Soft propaganda for the Palestinian cause, made up of words and images that speak in vivid terms about the incredible shrinking universe that Palestinians in Palestine inhabit, has a promising future. And already it's no longer propaganda in the strict sense: it's real and felt, vivacious and streetwise, web-years beyond the old mementos of the PLO and its counterparts around the world, who kept a wary eye on their national poets and projected their struggles in terms of the gun and the olive branch, the gun and the hoe, the gun and whatever else, from the smokestack to the ballot box. Any artist or writer worth her salt can be a credit to the Palestinian cause now, without the imprimatur of a liberation movement or a conspicuous nod in favour of armed struggle. Suheir Hammad, a poet out of Brooklyn (Drops of This Story, ZaatarDiva, Breaking Poems), is a good example: a younger, image-conscious, thoughtful militant for Palestine, one of a new generation who do the writing, while the Israelis oblige by extending the wall.