Source: Focus on the Family web page:   How to Teach About Religious Holidays  by Eric Buehrer,  Gateways to Better Education,

• Have your class read from the Bible about the birth of Jesus.  The federal court case of Florey vs. Sioux Falls in 1980 confirmed the fact that "music, art, literature and drama having religious themes or basis are permitted as part of the curriculum for school-sponsored activities and programs if presented in a prudent and objective manner and as a traditional part of the cultural and religious heritage of the particular holiday." 

• Have Christian students in your class share what their families or churches are doing to celebrate Christmas. 

• Have students speculate on the question: What if Jesus had never been born?  To help students make the connection between the birth of Jesus and their lives, you can prepare a lesson on the ways Christianity has affected American history.  (American culture or/and America's founding documents?)  You might include such things as: the Pilgrims' motivation for coming to America, the Declaration of Independence, the phrase on our coin, "In God We Trust," the abolition movement, and how the Rev. Martin Luther King's Christian faith motivated him in the civil rights movement. 

• Lead a class discussion on teachings of Jesus that are often referred to in American culture.  These teachings are encapsulated in such expressions as "Do unto others...," "Go the extra mile," "Turn the other cheek" and "the good Samaritan."   [Or/and see this page for: Common Phrases Found In The Bible; Do Biblical Colloquialisms Have A Secular Purpose? ]

• Read to students from Luke 2 ('Luke 2' only has 1207 words in the KJV.) and teach them related vocabulary words for a language arts unit. 

1.  Have students read various presidential proclamations.  You can find them at the library in 'The Public Papers of Presidents' published by the Government Printing Office or online.  Have them create a Christmas poster incorporating a quote from a proclamation of their choosing.  [search]
2.  Have students create a Christmas Survey to find out specifically what friends and relatives say is the reason for the season.  After the surveys are completed, have students discuss their findings and categorize the answers according to their similarities.  Conclude by having students write a summary of their findings. 
3.  Have students find out why we say "Merry" Christmas and not "Happy" Christmas.