The German pontiff told some 40,000 pilgrims in a rain-soaked St Peter's Square that signs of hope for peace in the Holy Land, Iraq and Lebanon "need to be confirmed by actions inspired by fairness and wisdom."
In the message in which the pope traditionally focuses on the world's trouble spots, Benedict called for protection of the rights of people "experiencing tragic humanitarian crises, such as those in Darfur and other regions of central Africa."
However, his first Christmas message was dominated by his concern for the spiritual well-being of his flock of some 1.2 billion Catholics, many of whom followed the annual event via a live television link-up to 68 countries.
"Men and women in our technological age risk becoming victims of their own intellectual and technical achievements, ending up in spiritual barrenness and emptiness of heart," he lamented on Sunday.
"Wake up, O men and women of the third millennium!" he said, urging people to open their hearts to the spiritual "light" of Christmas.
For his first Christmas Day message as pope, the 78-year-old pontiff appeared on the loggia of St Peter's basilica, from where his election as successor to the late Pope John Paul II was announced to the world on April 19.
A festive crowd, including thousands of children, took shelter under a sea of colourful umbrellas in the square, dominated by a giant Nativity scene and a 30-metre (100-foot) tree donated by Austria.
Pilgrims and tourists who had gathered from early morning chanted excitedly as they waited for the pope's appearance, heralded by a fanfare from an Italian military band and colourful ranks of halberd-wielding Swiss Guards snapping to attention.
Borrowing a phrase from former US president George Bush senior, Benedict said humanity needed to build a "new world order" based on "just, ethical and economic relationships."
"A united humanity will be able to confront the many problems of the present time, from the menace of terrorism to the humiliating poverty in which millions of human beings live, from the proliferation of weapons to the pandemics and the environmental destruction which threatens the future of our planet."
Benedict then delighted the huge crowd when he launched into Christmas greetings to television viewers around the world in 32 languages, including Arabic, Hebrew, Chinese and even Finnish -- a tradition first begun by John Paul II, who usually stretched to more than 60 languages.
The pope bowed to his doctrinal roots however by rounding off the greetings in Latin, the traditional language of the Church.
While greeting Italians -- who face a general election in April -- he urged them to "keep alive" their nation's Christian heritage.