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Peter Mikelbank
December 15, 2016 01:27 PM

Monaco’s royal twins are having a busy month!

Following their surprise appearance at a local Christmas market and their safari-themed birthday party, 2-year-old Princess Gabriella and Prince Jacques accompanied their parents Prince Albert II and Princess Charlene to the annual palace Christmas party on Wednesday, delighting the 600 children who were invited. 

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Briefly. 

“She’s a little girl and a little shy. There were 600 children,” one attendee tells PEOPLE, “all waiting on the stairwell in the Cours d’Honneur [outside the palace]. The royal couple came out into the courtyard from inside the palace. It was an amazing moment. Their children were walking with them and they walked about 150 feet toward the children on the stairwell.

“Everyone was excited and then Santa Claus really started to work the crowd. Calling on the children to make a lot of noise to welcome them. [Princess Gabriella] got a little scared—by the noise, by Santa’s big booming voice, by his calling on the children to make a lot of noise. Gabriella got a little scared and went right for her mother’s arms.” 

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Prince Jacques — who can be seen in a palace video high-fiving a costumed snowman and rabbit —  “went with it,” says the attendee. “He’s a very curious guy. At first, he too was a little intimidated by this big Santa Claus, a little scared too by this crowd making all this noise. At first, he went into the arms of his father, and then he got a little bolder and stayed the whole time.

“The prince and princess were incredible. The Monégasque children came toward them, toward Jacques spontaneously — and they had the best time.” 

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By the time order was restored and photographers ready, Gabriella, who is a “little more sensitive,” had opted out of this year’s photo, moving to the arms of her nanny.

After the outside moment, everyone moved inside the palace for the festivities. “Princess Charlene was in a great mood,” says the observer. “She really enjoyed it.” In keeping with the family nature of the annual event, Princess Stephanie’s children, Louis Ducruet and Camille Gottlieb, were also on hand to help with the children and hand out gifts.

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Begun by Albert’s parents Princess Grace and Prince Rainier in the early 1960s as a way of introducing the American princess to Monaco’s children, the annual children’s party is a unique event which culminates with each child receiving a gift directly from a member of the ruling family. 

And each child has the opportunity — if only for a few moments — to speak directly with the reigning sovereign.

While the first party featured a borrowed reel of Disney cartoons, the annual event has grown to become the holiday season’s most anticipated event; a family-type tradition that now comes with its own traditions, including gifts for the children, entertainment and its own legendary hot chocolate. This year a  magician took the stage, entertaining guests just before the gift presentation. Big this year were Switch & Go Dinos, dolls and Playmobils, Luke Skywalker Lego sets and for several older children, camera-flying drones. Each child receives a gift which has been researched in advance to suit their particular want or need — and when the presentation occurs (this year in three waves), “there’s an organized scramble when the children’s names are called out.” 

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Palace staff are drawn into the planning and preparation and on the day, all hands are employed wrangling guests. (In turn, there’s another party, this year on Friday evening, for palace employee children which Jacques and Gabriella are expected to attend as well.) 

Given its extremely informal nature, the Christmas party also provides a bold contrast to its location. The festivities are held in the State Apartments, a private area decorated with silk brocade, damask and royal portraits, otherwise reserved throughout the year for official diplomatic receptions only. 

And this year, Albert and Charlene enjoyed another palace Christmas tradition. After the children’s party was over, the couple invited their party helpers to a tea la française, a traditional English afternoon tea served with a flute of Lanson champagne and small group photos.

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