Bethlehem is a city in Palestine that Phil says he's going to go to on a road trip with Joel at the end of Joel Fights Crime, Phil Rewrites Time. In Bonus Stages, Joel gets there, but Phil doesn't catch up with him, instead travelling back in time to Car to try to stop the series from ever happening.
Joel believes that Cleopatra's treasure is buried in Bethlehem. When beginning his quest, he meets Jesus, despite actually being The Stomach King in disguise. They try getting in a fight, but Phil cancels out the universe just before they can do anything, and Bethlehem (along with everything else) disappears.
- Bonus Stages