Christmas is not celebrated in the Muslim world. Muslims do believe in the virgin birth of Jesus, as the Qur'an tells stories about his birth, teachings and his life as a prophet of God. However, they do not celebrate the anniversary of Jesus' birth as a holiday.
With the exception of small Christian communities in the Middle East, there are no public celebrations or decorations of Christmas in the Muslim world. In some parts of the Muslim world, Christmas is viewed as a European holiday and may be accompanied by parties and feasts in which Muslims participate. However, that does not alter the fact that Muslims do not view Christmas as a holy day.