Archaeologists have uncovered a tiny clay seal inscribed with the word "Bethlehem" in what is believed to be the earliest evidence for the existence of the ancient biblical city.

"The first ancient artefact constituting tangible evidence of the existence of the city of Bethlehem, which is mentioned in the Bible, was recently discovered in Jerusalem," a statement Wednesday from the Israel Antiquities Authority said.

The artefact -- a piece of clay used for sealing a document or other object, known as a ´bulla´ -- was uncovered during excavations at the City of David, a site just outside the southern wall of Jerusalem´s Old City.

On the seal, which measures around 1.5 centimetres (about half an inch), was the name of the city written in ancient Hebrew script, it said.

"This is the first time the name Bethlehem appears outside the Bible, in an inscription from the First Temple period, which proves that Bethlehem was indeed a city in the Kingdom of Judah, and possibly also in earlier periods," said Eli Shukron, who led the dig.

He said the bulla belonged to a shipment of tax documents which were sent from Bethlehem to the king in Jerusalem, as part of a taxation system used in the Kingdom of Judah in the late eighth and seventh centuries BC.

Bethlehem is first mentioned in Genesis, the first book of the Bible, as the burial place of Rachel, wife of the patriarch Jacob.

According to the New Testament, the West Bank city of Bethlehem, which lies just south of Jerusalem, was also the birthplace of Jesus. (Copyright © 2012 Agence France Presse. 05/23/12)