Usaamah ibn Zayd (a Companion) said that the Prophet of Allah, sallallaahu 'alayhi wa sallam, sat him and Al-Hasan on his two knees, then he, sallallaahu ‘alayhi wa sallam, would hold them close to him and say: "O Allah, have mercy upon them, for I have mercy uponthem."
Since a gift has a great effect upon people, especially children, the Prophet of Allah, sallallaahu 'alayhi wa sallam, would give presents to his grandchildren.
'Aa'ishah said: "The Najaashi (ruler of Ethiopia) sent some jewelry as a gift to the Prophet of Allah, sallallaahu 'alayhi wa sallam, and among it was a gold ring. The Prophet of Allah, sallallaahu 'alayhi wa sallam, picked it up with a stick keeping it away from him, or with his fingers. He, sallallaahu 'alayhi wa sallam, then called for Umaamah, his granddaughter from Zaynab and said to her: "Adorn yourself with it, my daughter."