  Long Gamma-Ray Bursts (GRBs) are the most dramatic examples of massive
stellar deaths, usually as- sociated with supernovae (Woosley et al. 2006).
They release ultra-relativistic jets producing non-thermal emission through
synchrotron radiation as they interact with the surrounding medium (Zhang et
al. 2004). Here we report observations of the peculiar GRB 101225A (the
"Christmas burst"). Its gamma-ray emission was exceptionally long and followed
by a bright X-ray transient with a hot thermal component and an unusual optical
counterpart. During the first 10 days, the optical emission evolved as an
expanding, cooling blackbody after which an additional component, consistent
with a faint supernova, emerged. We determine its distance to 1.6 Gpc by
fitting the spectral-energy distribution and light curve of the optical
emission with a GRB-supernova template. Deep optical observations may have
revealed a faint, unresolved host galaxy. Our proposed progenitor is a helium
star-neutron star merger that underwent a common envelope phase expelling its
hydrogen envelope. The resulting explosion created a GRB-like jet which gets
thermalized by interacting with the dense, previously ejected material and thus
creating the observed black-body, until finally the emission from the supernova
dominated. An alternative explanation is a minor body falling onto a neutron
star in the Galaxy (Campana et al. 2011).
