The Pope has called on atheists to unite with believers of all religions and work for "a homemade peace" that can spread across the world.
Speaking to about 70,000 people from the central balcony of St Peter's Basilica, Pope Francis also made another appeal for the environment to be saved from "human greed and rapacity".
Celebrating his first Christmas as leader of the 1.2 billion-member Catholic Church, he centred his first "Urbi et Orbi" (to the city and world) message on the theme of peace.
Pope Francis holds a statue of Jesus at Christmas Eve mass at the Vatican"Peace is a daily commitment. It is a homemade peace," he said.
"I invite even non-believers to desire peace. (Join us) with your desire, a desire that widens the heart. Let us all unite, either with prayer or with desire, but everyone, for peace."
His words came on the same day that bombers targeted Christians in Iraq, with two bomb blasts killing 22 people in the capital, Baghdad.
Pope Francis called for "social harmony in South Sudan, where current tensions have already caused numerous victims and are threatening peaceful coexistence in that young state".
Thousands gathered at Manger Square near the Church of the NativityThousands are believed to have died in violence divided along ethnic lines between the Nuer and Dinka tribes in the country, which seceded from Sudan in 2011 after decades of war.
A similar message calling for an end to conflicts was delivered by the Archbishop of Canterbury, who was also delivering his first Christmas Day address as head of his church.
The Pope also called for dialogue to end the conflicts in Syria, Nigeria, Democratic Republic of Congo and Iraq, and prayed for a "favourable outcome" to the peace process between Israelis and Palestinians.
Pilgrims came from all over the world to experience Christmas at the Vatican.
"(He) is bringing a new era into the Church, a Church that is focusing much more on the poor and that is more austere, more lively," said Dolores Di Benedetto, who came from the Pope's homeland, Argentina, to attend Christmas Eve Mass.
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