Cultural connections: this cultural centre in Bethlehem sensitively connects with and invigorates the physical and social life of the town.

Building in the Holy Land is underscored by both the weight of ancient religions and the more unforgiving contemporary dynamics of conflict, politics and culture. Bethlehem, the site of Jesus' birth and one of the most sacred places in Christendom, is today a scrubby hillside town in Israel's West Bank, nominally under Palestinian jurisdiction as one of a disparate patchwork of autonomous Palestinian territories. Populated mainly by Muslims, with a Christian minority, it scrapes by on fitful bouts of religious tourism (it is also the birthplace of King David), but this has waned in the wake of recent Palestinian suicide bombing campaigns.

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Though like much of the region, Bethlehem's wider future still remains uncertain, the turn of the millennium marked an important milestone in the town's history and set the authorities thinking about what they could do to upgrade Bethlehem's dilapidated infrastructure to improve conditions for the local population and also sustain and encourage tourism. As well as undertaking a programme of infrastructural improvements, the town's most important streets, alleys and squares have been renovated.

As part of this programme, Finnish architect Juha Leiviska was invited to design an annexe to the Dar al-Kalima Academy in the centre of town. The Academy operates under the auspices of the local Finnish Lutheran church, but its remit is to promote connection and understanding between people of different religious and cultural backgrounds and support the folk culture of Palestine. These laudable aims have the wider backing of the Finnish Foreign Ministry which financed the project and oversaw a national architectural competition to find a suitable scheme.

Leiviska is known for his distinctively spare yet highly resonant architecture, much of it for religious programmes. His many churches succeed brilliantly in capturing a powerful sense of the numinous in a contemporary language. Here the challenge was to tactfully add to and enhance an existing complex shoehorned into a tight urban site dominated at the north end by the existing Lutheran church. Making a virtue out of adversity, Leiviska exploits the height difference across the site to create a series of terraces that maintain and enhance connections between new and existing elements, so that in some ways, the scheme is like a town in microcosm, with a variety of places, spaces and views generated by the tight grain of the architecture.

Leiviska admits to being influenced by the denseness and informality of the historic surroundings, qualities which permeate the form and organization of the new parts. Pale local sandstone is used to clad the crisp cubic volumes (its use in Bethlehem's historic core is obligatory), further underscoring the sense of place, though the way in which Leiviska applies it, as a thin facing skin, around 30mm thick rather than loadbearing blocks, is an innovation for the context. Leiviska's sharp-edged stone is precisely cut and finely jointed, unlike massive, more traditional loadbearing structures.

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The focus of the complex is a 300 seat hall for concerts, drama and meetings, giving the centre a new impetus for public performances and also encouraging general engagement with the life of the town. Sunk below the level of the original courtyard and entrance level, the hall is dug into the site. This resolves circulation problems by opening up a route below the old building to a group of small courtyards at the north end of the site. The route threads through and terminates in the crypt of the Lutheran church where the cultural centre was originally housed. Carving out and opening up spaces creates a fertile reciprocity between old and new, as well as rationalizing circulation for the entire complex. In a subtle sleight of hand, by pulling one edge of the hall back from the site border, Leiviska also manages to preserve a quartet of ancient pine trees on the south-east edge of the site. The trees provide welcome shade to the hugger mugger geometry of cubic volumes and terraces.

The main entrance to the new building is on the east side, connecting with a lounge at intermediate level between the theatre below and a restaurant above. The volumes of the lounge and restaurant are progressively pulled back on their western edges, creating a staggered facade rhythmically animated by balconies and horizontal brise soleil, which throw a pattern of deep shadows across the stone and glass facades.

Each level connects with outside space, so dissolving the boundaries between interior and exterior, and alluding to the traditional form of Middle Eastern buildings, with their intimate internal realms, often animated by greenery and water. At the topmost restaurant level, the tall pine trees act as natural parasols, while planting is intended to trail up the fin-like wall projections to engulf the overhanging brise soleil, enhancing shade, filtering daylight and softening the building's orthogonal contours.

Internally, spaces are ascetically detailed with pale stone floors and walls. Blond wood furniture imparts an aura of calmness and Scandinavian civility. Glazed along its western side, the new performance hall is a dignified, double-height space that irresistibly recalls Leiviska's simple, solemn church interiors, with cool white walls, tall windows, suspended light fittings, no seating rake and a small raised proscenium stage at one end. And though the religious connection may be obvious, it is also appropriate, since the new building physically adds to an existing church and hopefully, despite its deeply troubled and uncertain context, can act as greater unifying force for good.

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