Francis spoke from the central balcony of St. Peter's Basilica to some 70,000 cheering tourists, pilgrims and Romans in the square below. He said he was joining all those hoping "for a better world."
Among places ravaged by conflict, Francis singled out Syria, which saw its third Christmas during civil war, South Sudan, the Central African Republic, Nigeria and Iraq.
Francis then explained his concept of peace.
"True peace is not a balancing of opposing forces. It's not a lovely facade which conceals conflicts and divisions," the pope said in his first Christmas message since being elected pontiff in March. "Peace calls for daily commitment," Francis said, reading the pages of his speech which were ruffled by a chilly wind.
Recalling the hundreds of migrants who drowned trying to reach European shores, Francis also prayed that refugees receive hope, consolation and assistance.
In the Mideast, pilgrims celebrated Christmas Day in the ancient Bethlehem church where tradition holds Jesus was born, as candles illuminated the sacred site and the joyous sound of prayer filled its overflowing halls.
This year's turnout has been the largest in years in Bethlehem, and the celebrations have been marked by careful optimism amid ongoing Israeli-Palestinian peace talks. Leaders expressed hope that the coming year would finally bring the Palestinians an independent state of their own.
"The whole world now is looking at Bethlehem, the birthplace of Jesus," Twal said in his annual address. "The Holy Land is where Jesus was born in the grotto and we have to reflect this bright picture of Jesus by representing the morals of Jesus, the message of Jesus - the message of love and reconciliation."
Following a Palestinian uprising that began in 2000, the numbers of visitors to Bethlehem had plunged, including for Christmas.
But thanks to a period of relative calm, they have been steadily climbing in recent years and while still below the record levels of the 1990s, got an extra push this year following the resumption of Israeli-Palestinian peace talks.
Iskandar Salameh, an 18-year-old Palestinian, said the Christmas spirit was uniting those gathered today.
"We all feel that Jesus is with us today," he said. Later, Pope Francis will deliver his first Christmas message as pontiff from the central balcony of St. Peter's Basilica to pilgrims, tourists and Romans gathered in the piazza below.
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