Some historians believe that Santarém's beginnings date to as early as 1200 BC and the age of Ulysses. Its strategic location led several kings to choose it as their residence, and the Cortes (Parliament) frequently met here. Thanks to its royal connections, Santarém is more richly endowed with monuments than other towns of its size. The Portuguese refer to it as their "Gothic capital."

Present-day Santarém, high above the Tagus River, is an important farming and livestock center. It holds the largest agricultural fair in the country, just outside town. Even with a tradition of bull breeding and bullfighting, Santarém curiously has what is considered the ugliest bullring on the Iberian Peninsula. Santarém also has bull farms and a working stud farm.

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