The fact that both festivals occur at about the same time is mere co-incidence. Xmas celebrates an intrinsically Christian event (and probably gets the date wrong anyhow). Chanukah, despite its universalistic ethics, is Jewish. There is so much Xmas in the atmosphere at the end of December that one understands why some Jewish families get caught up in its hype, but Santa Claus, Xmas carols and presents on the Xmas tree are out of place for Jews. Since Judaism does not pay homage to Jesus, his birthday is irrelevant for Jews.
What about tolerance and good will? We respect each other, but we aren’t clones of one another, and we dare not gloss over the differences. Nor does it help to say Xmas is now a secular holiday invented for commercial reasons. If this is all that Xmas has become, the Christians should feel insulted, and Jews should not be part of the insult.
The more serious opinion-makers on both sides argue that both festivals celebrate light. There are festivals of light in many cultures. As an aside, let me recall that when Rev Fred Nile spearheaded an organisation in Australia called Festival of Light he more or less hijacked a name which belonged in different ways to almost every people and faith.
The rhythm of time is central to everyone’s civilisation and the contrast of darkness and light is a major symbol. In Judaism the theme of light punctuates Biblical literature and is one of the chief features of the prayer book and the rabbinic tradition. It even gave rise to some of our great religious controversies, for example the conflict of the Karaites and Rabbanites over whether a light could burn in a Jewish house on the Sabbath.
Since the ner tamid symbolised the Divine presence in the Tabernacle and Temple as in the wider world, it is no wonder that the invaders of the Temple thought they would quench Judaism if they extinguished the light, and the victorious Maccabees were adamant that rekindling the ner tamid was a priority.
One cannot believe Chanukah echoed an old pagan sun festival. Like all our festivals, it is a movable feast independent of the solar months. True, some ancient Jewish sects had a solar calendar, but they are an eccentric feature of Jewish history with little influence.
Christianity had an early doctrine of Jesus as “the light of the world” and utilised the idea of the sun as an analogy, with some of the saints regarding Jesus as the new or true sun. Associating his birth with mid-winter invited the symbolism of a new flash of light. It possibly reflected the Roman celebration of the unconquered sun.
There is no law against two religions having festivals of light at the same time of the year, but co-incidence does not mean commonality. They are two different festivals and we are two different faiths. We celebrate for two different reasons. But it should be each to their own.