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Local schools are certainly on holidays. But, not because they celebrate Xmas/NY, but because it's the end of the term/semester and, similar to the June/July holidays in Australia which happen to coincidentally happen to have an Eid fall in them some years.
When Ramadan falls during this season (Dec/Jan) you'll see how irrelevant it is to the system (this isn't me being rude, but in Australia, for example, we have actual passport holders who are Muslim/Hindu/Jewish etc. who do not get their religious holidays, even though that is 'their country', but people come here as expatriates and expect that they should be given certain holidays as a right).
Yup. School holidays here has nothing to do with Christmas - in the same way as when Ramadan falls during school holidays in Western countries it's not because that country is celebrating Ramadan