In the name of Christian forgiveness, Bethlehem residents are resurrecting a piece of graffiti by the British street artist Banksy after a misunderstanding left his artwork covered in white paint.

Banksy’s Bethlehem graffiti was meant to promote tourism but Palestinian residents had difficulty with the satirical images.

Just before Christmas a small group of incensed locals painted over a Banksy image of a soldier asking a donkey for identification papers in the belief that it compared Palestinians to donkeys.

Word soon spread that Banksy had intended to convey the plight of the Palestinians in Bethlehem, whose city is encircled by the separation barrier and Israeli military checkpoints – and that the image could be worth thousands of pounds. Residents are now trying to restore it by using paint removers and scrapers to peel back the white paint and reveal the original piece.

“We are working to bring back the art in the Christmas spirit of forgiveness and turning the other cheek,” said Jamil Daweeb, a teacher.

Another resident, who lives across the road from the image, said it was “a shame” that someone had painted over the artwork, when they could have taken it down and sold it for a profit.

Banksy, with other street artists, produced a series of images in Bethlehem to highlight the town’s plight.

An American buyer has offered £75,600 to one resident for the wall of his home, where Banksy spray-painted a little girl in a pink dress frisking a soldier for weapons.

Other images include a dove wearing a bulletproof vest with a sniper’s crossfire aimed at its chest, and a rat shooting a slingshot at an army watchtower. Residents have reportedly concocted schemes to remove images that are sprayed on larger blocks of concrete, and sell them to art buyers abroad.

While Banksy declined to comment on the incident, his press officer told The Times that the nature of street art was transient.

Editor's choice

• The 100 Best Films of the Decade
• 70 facts you didn't know about Marvel
• The 50 Biggest Movies Of 2010