Pope John Paul said that violence in God's name was never justified and that a "cry of blood" in the Holy Land must persuade Christians, Muslims and Jews to seek peace.
"Throughout the world a piercing cry invoking peace rings out," the Pope said in his New Year address from Saint Peter's Basilica to mark the church's World Day of Peace.
The Pope said the September 11th attacks on the United States had shaken the world. He condemned the use of violence in the name of God but urged people not to fall prey to despair.
"No one, for any reason, can kill in the name of God," he told the packed congregation in an impassioned address.
"However humanly difficult it may seem to look toward the future with optimism, we must not give in to the temptation to be discouraged," he said. "On the contrary, we must work towards peace with courage, confident that evil will not prevail." He called on monotheistic religions to condemn the use of violence and said Christians, Muslims and Jews must restore peace to the Holy Land.
"The cry of blood calls from God from that land, the blood of brothers spilt by brothers, all sons of the same Patriach Abraham, sons, as are all men, of the same Holy Father." The theme of this year's World Day of Peace is that there can be no peace without justice and no justice without forgiveness.
On December 11th the Pope said self-defence against terror attacks was legitimate but the offended parties had to be careful to single out individuals responsible rather than entire groups or religions for blame.
"Justice and forgiveness are not at odds with each other, rather they are complementary, because both are essential for the promotion of peace," he said.
"Only forgiveness can quench the thirst for revenge and open the heart to a real and lasting reconciliation between peoples." The 81-year-old Pope, whose health appeared shaky over Christmas, seemed to be in relatively good form yesterday, reading his homily in a firm and clear voice.
He is due to host a summit of religious leaders in Assisi on January 24th to pray for peace.
During yesterday's Mass, a choir, which came with the blessing of Russian Orthodox Patriarch Alexiy II, sang for the Pope. The presence of the choir was seen as a warming in sometimes chilly relations between the Vatican and the Russian Orthodox church.
Meanwhile vandals set fire to more than 200 cars overnight in France, in what in some areas has become an annual ritual associated with the new year celebrations. As in previous years, the worst of the violence was in the eastern city of Strasbourg, where 44 cars were burned out and 30 people arrested.
Four policemen were hit by shotgun pellets, and one underwent emergency surgery on his eye. Most of the other damage occurred in various suburbs of Paris.
Iran's morals police poured hundreds of bottles of bootleg vodka into the gutters of Tehran as the capital celebrated the "Christian" new year.
Suppliers of the illegal alcohol were also arrested, but otherwise the police who had swooped on dozens of "depraved" parties last year and made hundreds of arrests kept a low profile.
More than 5,000 Armenian Christians celebrated an unprecedented midnight Mass in their cathedral, outside which stood a huge decorated Christmas tree set up by the local municipality as a sign of friendship between Christians and Iran's Muslim majority. A large board bore a quotation from the founder of the Islamic republic, Ayatollah Khomeini, "People of Jesus, remain believers".