The elusive street artist has painted six provocative new images – including a dove of peace strapped with a bulletproof vest and a young girl with pigtails frisking an Israeli soldier – on buildings around the West Bank town.

Banksy, who has achieved cult status for his edgy satirical images, has also converted a fast food shop opposite Bethlehem's Church of the Nativity into an art gallery showing work by artists from the Palestinian territories and abroad.

The artist's images have fetched hundreds of thousands of dollars in auctions and his customers include Hollywood siren Angelina Jolie. But Banksy keeps his real identity secret and almost never gives interviews. Other artists exhibiting in Bethlehem said they hoped the show would draw attention to life in the occupied West Bank and help forge links between local and international artists.

"It's important for people to come to Bethlehem and actually see what's happening rather than just doing the usual art collector thing and making a deal over the phone," British artist Peter Kennard told Reuters.

Bethlehem residents say military checkpoints and Israel's West Bank barrier, which cuts into Palestinian land, is stifling tourism and damaging Bethlehem's economy.

Banksy made headlines in 2005 by painting a series of playful images on the Palestinian side of the barrier, which Israel says it built to keep out suicide bombers.

The new images are more eye-catching. Pilgrims arriving in Bethlehem for Christmas will see a huge mural of a dove on the side of a house riddled with bullet holes. The dove faces an Israeli military watchtower and is wearing a bullet-proof vest.

Around the corner, one of Banksy's trademark stencilled rats is pictured poised with a catapult aimed at another watchtower while at the exhibition, he is showing a sculpture of a Christmas cherub with a rock piercing its stomach and blood frothing from the wound.

All pieces at the exhibition will be sold to the highest bidder and the proceeds donated to local charities.

The irony behind one mural of an Israeli soldier asking a donkey for his identity papers was lost on some locals, who found it offensive. But Salem Salman, who runs a souvenir shop opposite thought it was funny, and made a neat political point.

"I like it," said Salman, who sells Virgin Mary miniatures to pilgrims on daytrips from Jerusalem. "It describes the situation here, the occupation. It shows how the Israeli soldiers treat us like animals."