In the place where the Betlemi Church of the Nativity now stands, the Armenians who had immigrated from Iran founded the convent of Surb Stephanos (or St. Stephanos). In 1868, a domed church was built in its place.
This church was renovated in 1910, with its interior painting taking place between 1991 and 1997.
Today, there is an “inscribed cross”-type building atop a brick citadel faced with stone. The windows of the dome are inside the arch, and the entrances to the church are from the north and west. There is a wide, two-way stone staircase leading to the northern door.
Over the arched iron door is a painted depiction of the icon of the Saviour Not Made By Hands, in a lunette.
The district is called Betlemi District, after the church. The Betlemi Stair-Street has 120 steps along the cliff in the Betlemi District. In the middle of the steps is Lower Betlemi Church, and at the end of the steps is the Upper Betlemi Church.