VATICAN CITY (DPA) - Pope Benedict XVI late on Monday prayed for peace in the Middle East and warned against religious fundamentalism as he celebrated a traditional Christmas Eve mass for the world's 1.2 billion Catholics.
Thousands of people flocked to the Vatican Basilica in St Peter's Square for the two-hour service. The proceedings were also broadcast worldwide.
Holding a golden cross and wearing gold-embroidered robes and his bishop's mitre, the 85-year-old Benedict looked frail but alert. Like last year, he made his way up the basilica's nave towards the altar standing on a platform on wheels and surrounded by aides and bodyguards.
''Let us pray that Israelis and Palestinians may be able to live their lives in the peace of the one God and in freedom,'' the pope said in his homily. He also mentioned conflict-stricken Lebanon, Syria, Iraq and their neighbours.
He appealed for peace and asked ''that Christians in those lands where our faith was born may be able to continue living there, that Christians and Muslims may build up their countries side by side in God's peace.''
The German pontiff refuted assertions that religions, especially monotheism, are to blame for violence and wars in the world, though he acknowledged that ''religion can become corrupted.'' He warned: ''We must be on the lookout for these distortions of the sacred.''
As in recent years, the start of the ''midnight'' mass was brought forward to 10pm (2100 GMT) to allow the ageing pope a few extra hours' sleep before his Christmas Day duties. Monday's was his eight Christmas Eve celebration since his election in 2005.
On Tuesday, he was scheduled at noon to deliver his Christmas Day blessings and multilingual Urbi et Orbi (to the city and to the world) messages.
Last week, the pope raised his voice against gay marriage, saying that an ''attack'' was taking place against ''the true structure of the family, made up of father, mother, and child.''
Christmas comes at the end of a difficult year for the Catholic Church. It was marked by the so-called VatiLeaks scandal, which saw confidential papal papers shedding light on suspected cronyism, waste and corruption within the Vatican being passed on to the press.
Benedict's former butler, Paolo Gabriele, was sentenced to 18 months' imprisonment over the affair, but was pardoned by the pope on Saturday, a day on which the pontiff offered his Angelus prayers to the sick, prison inmates, the elderly and children.
One example of questionable spending exposed by VatiLeaks was a 550,000-euro (723,000-dollar) budget for the 2009 nativity scene.
This year, it was donated for free to the Vatican by the southern Italian region of Basilicata.
The scene, which recreates Jesus' birth, was unveiled earlier Monday. It was placed at the foot of the ancient Egyptian obelisk at the centre of St Peter's Square, standing next to a 24-meter-tall Christmas tree.
After the ceremony, the pope briefly appeared from his office window. He raised a lit ''peace'' candle in the air, waved it in a cross sign, placed it on the sill and greeted crowds, who responded with applause.