Pope Benedict XVI on Tuesday in his traditional Christmas Day greeting and Urbi et Orbi message "to the city and the world" urged the faithful to accept God's "great light" of peace.

Christmas is the "holy day on which the 'great light' of Christ shines forth, bearing peace," the pontiff said from the central balcony of St Peter's Basilica in Rome.

"Certainly, if we are to recognize it, if we are to receive it, faith is needed and humility is needed," the pontiff said, citing the example of Jesus' parents, Mary and Joseph.

"Men and women of this modern age, Christ comes also to us bringing his light, he comes also to us granting peace! But who is watching, in the night of doubt and uncertainty, with a vigilant, praying heart?" Benedict asked.

The pontiff mentioned a series of conflicts afflicting the modern world which he said were in urgent need of "God's light."

"My thoughts turn especially to those places where the grim sound of arms continues to reverberate; to the tortured regions of Darfur, Somalia, the north of the Democratic Republic of Congo, the border between Eritrea and Ethiopia; to the whole of the Middle East - especially Iraq, Lebanon and the Holy Land; to Afghanistan, Pakistan and Sri Lanka, to the Balkans and to many other crisis situations that unfortunately are frequently forgotten," Benedict said.

"May the Child Jesus bring relief to those who are suffering and may he bestow upon political leaders the wisdom and courage to seek and find humane, just and lasting solutions," he said.

The pontiff then repeated in 63 languages his Christmas greeting to the tens of thousands of people gathered in St Peter's Square and those following the event on television and radio.

"May the birth of the Prince of Peace remind the world where its true happiness lies; and may your hearts be filled with hope and joy, for the Saviour has been born for us," Benedict said, his greeting met by cheers and the waving of flags in St Peter's Square.

Some 95 television networks were expected to broadcast the pontiff's greeting to 57 countries.

Hours earlier Benedict ushered in the Vatican's Christmas celebrations by leading traditional midnight Christmas Mass in St Peter's Basilica.

In his homily, the 80-year-old-pontiff urged the faithful to follow Mary's example by making room in their lives for God and for those less fortunate than themselves, including the poor and asylum seekers.

"In some way, mankind is awaiting God, waiting for him to draw near. But when the moment comes, there is no room for him," Benedict said during the midnight Mass.

But Benedict also said that Christmas represented Jesus' arrival on Earth, a world "ill-treated" including, in modern times, by man's harm to the environment.

The spiritual leader of the world's 1.1 billion Catholics said the earth was threatened "through the abuse of energy and its selfish and reckless exploitation."