NAPLES, Italy (Reuters) -- Naples is no stranger to crime, but with its long tradition of creche-making falling victim to Mafia threats and terrorist fears, it seems not even Christmas is sacred this year.

Every December, the narrow cobbled street of San Gregorio Armeno in the heart of Naples comes alive as artisans peddle their often witty, hand-crafted nativity scenes featuring personalities of the moment alongside Jesus and Mary.

Last Christmas, a camel-riding Osama bin Laden was displayed next to a big-eared U.S. President George W. Bush in many of the stalls. The man blamed for the September 11, 2001 attacks on the United States was also featured locked in a jail.

But most plans to make Saddam Hussein the central figure were scrapped after a suicide bomber killed 19 Italians in Iraq.

"This year, it's not something to joke about," said Angela Loffredo, one of the owners of the "Pastori dalle Mani Pulite" or "Clean Hands" creche shop which made poking fun at politicians accused of corruption one of its trademarks.

Her husband said models of Saddam, the Iraqi leader who was toppled by U.S.-led forces, had been prepared but he had never followed through on plans to produce the figurines.

Another artisan a few doors down was more explicit.

"There is a lot of fear -- even here in Naples -- that Italy is a terrorist target. This is a well-known street so why draw attention to yourself?" he asked. ---------Mob Muscling in---------

Creche-makers have also had to grapple with the Naples-based Mafia, known as the Camorra, this Christmas season.

Police here received an anonymous letter at the beginning of the month from creche-makers saying they were being squeezed by mobsters and needed more protection.

According to the letter, which was also sent to local papers, the Camorra had demanded 2,000 euros ($2,451) per stall to allow creche-makers "to work in peace through Christmas".

"Racket even in creche district!" one newspaper declared.

Police patrols were beefed up in the district, which has been making nativity scenes for 10 centuries, but many artisans say they have little hope that it will help. "Everybody pays off the Camorra. You have to pay them off just to park your car," the owner of one shop said. "And at Christmas this is where the business is."

But worries about the Mafia and suicide bombers haven't kept the crowds away. On a recent Sunday, visitors packed the stalls of creches to shop for trimmings from angels to miniature caged pigs and fish splashing in real, running water.

The one shop that did make Saddam figures had no regrets. "Some artisans said it wasn't a good idea, but Saddam is selling," a saleswoman at "I Romano" shop said. "I don't know, maybe people want to put it in their bathroom."