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In many Muslim countries, particularly Egypt, it is common to decorate for Ramadan with a fanoos (plural: fawanees). These traditional lanterns are made from metal and often have multi-colored glass and beautiful and unique shapes and patterns.
Click here for a fun activity of designing and coloring a fanoos for children provided by the Qatar Foundation: http://fanous.qfi.org/
And click on the picture below to check out step-by-step instructions on making lanterns in a more Morroccan style.These have been posted (along with free printables) by the super talented Sweet Fajr Blog:
Lastly, check out the lantern page in Peter Gould's Ramadan Fun Pack.These can be cut out and hung on twine or ribbon in fun colors like the following sample:
(Source: by Umamah Moin via Pinterest)