Celebrations are of different types, and the rulings on them vary accordingly, whether those celebrations are held by Muslims or non-Muslims. In discussing this matter we may note the following points:
It is not permissible for the Muslim to take part in the religious celebrations of the kuffaar and it is not permissible for them to congratulate them on those occasions at all. This is the most serious kind of celebration in terms of sin, because it may lead the one who does that to kufr.
Ibn al-Qayyim (may Allah have mercy on him) said:
Congratulating the kuffaar on the rituals that belong only to them is haraam by consensus, as is congratulating them on their festivals and fasts by saying A happy festival to you' or May you enjoy your festival,' and so on. If the one who says this has been saved from kufr, it is still forbidden. It is like congratulating someone for prostrating to the cross, or even worse than that. It is as great a sin as congratulating someone for drinking wine, or murdering someone, or having illicit sexual relations, and so on.
Ahkaam Ahl adh-Dhimmah
Adh-Dhahabi said: If the Christians have a festival and the Jews have a festival, then that is exclusively for them, so no Muslim should join them in that as he does not join them in their religion or their direction of prayer
Tashbeeh al-Khasees bi Ahl al-Khamees, in Majallat al-Hikmah, issue 4, p, 193
Please see the answers to questions no. 947, 11427, 4528, 1130, and 115148
The scholars differed concerning the ruling on attending celebrations of the non-Muslims on their special occasions such as marriage, recovering from sickness and return from travel. The most correct scholarly opinion is that it is permissible on condition that it serves a legitimate shari interest, such as opening their hearts to Islam or calling them to the faith.
For a detailed discussion of that, please see the answer to question no. 127500
On occasions and celebrations that are unique to the kuffaar, it is not permissible for the Muslim to imitate the kuffaar in dress, eating certain types of food or activities that are exclusive to these occasions. That includes lighting candles and walking around with them.
Shaykh al-Islam Ibn Taymiyah (may Allah have mercy on him) said:
It is not permissible for the Muslims to imitate them in any way that is unique to their festivals, whether it be food, clothes, bathing, lighting fires or refraining from usual work or worship, and so on. And it is not permissible to give a feast or to exchange gifts or to sell things that help them to celebrate their festivals, or to let children and others play the games that are played on their festivals, or to adorn oneself or put up decorations.
In general, (Muslims) are not allowed to single out the festivals of the kuffaar for any of these rituals or customs. Rather the day of their festivals is just an ordinary day for the Muslims, and they should not single it out for any activity that is part of what the kuffaar do on these days.
Majmoo al-Fataawa, 25/329
It is not permissible for the Muslim to attend celebrations of the kuffaar or the Muslims in which there is propagation of any false religion or ideology, or in which there is praise for any deviant idea or belief.
See the answer to question no. 3325 and 10213
It is not permissible for the Muslim to attend any celebration of the kuffaar or the Muslims if it is done in the manner of a repeated festival every year or every month and so on, like birthdays and Mother's Day.
See the answer to questions no. 5219, 1027, 26804 and 59905
It is not permissible for the Muslim to attend any celebration of the kuffaar or the Muslims that is a haraam celebration in terms of the occasion, such as Valentine's Day, the birthday of an evildoer or tyrant, or the anniversary of the founding of any group or party that is based on kufr or immorality.
See the answer to question no. 135119
It is not permissible for the Muslim to attend any celebration of the kuffaar or the Muslims in which there is mixing with women, or music, or where haraam food is eaten.
See the answer to question no. 6992 and 97014
Once you understand what is stated above, it will be clear to you that this gathering is haraam, as is what happened in it, because of the mixing and the imitation of the kuffaar by lighting candles and walking around with them, as well as veneration of that false religion and propagation thereof, not just because of keeping quiet about it, but also because of joining in and showing respect for its rituals in that haraam gathering.
And Allah knows best.
Reproduced from Islam QA