Vatican City  - Pope Benedict XVI celebrated Christmas midnight Mass on Wednesday, and commemorating Jesus' humble birth, drew attention to the plight of the poor and of children suffering neglect and abuse.

The pontiff also prayed for an end to "hatred and violence" in the Holy Land which he is likely to visit in May 2009, according to recent remarks by the Latin Patriarch of Jerusalem, Fouad Twal.

In his homily, the 81-year-old Benedict cited the Gospel of Luke which describes how the coming of the baby Jesus caught the attention of shepherds tending their flocks in the outskirts of Bethlehem.

"God first raised the veil of his hiddenness to people of very low status, people who were looked down upon by society at large," Benedict said.

According to Luke, angels singing the hymn, "Glory to God in the highest heavens and peace on earth to people of his good will," appeared to the shepherds.

"Who are these people of 'his good will' if not the poor, the watchful, the expectant," Benedict, the spiritual leader of the world's 1.1 billion Roman Catholics, told a packed St Peter's Basilica.

In remarks ahead of Wednesday night's celebration, Benedict said the current global economic crisis could help people rediscover the "true" values of life, love and charity.

Christmas represents God "stooping down" and becoming, in a lowly stable, a newborn child, which is a "state of complete dependence," the pontiff said in his homily.

He then urged the faithful to reflect on the conditions faced by children who are "denied the love of their parents", those forced to live on the streets and those exploited as child soldiers.

"Let us think of those children who are victims of the industry of pornography and every other appalling form of abuse, and thus traumatized in the depths of their souls," Benedict said.

A few minutes of silence followed the homily. Then the pontiff, dressed in white robes with gold embroidering, knelt in prayer while a choir sang hymns.

At the end of the ceremony, Benedict walked out of the Basilica and into St Peter's Square. There he stood solemnly before the statue of the baby Jesus lying in the manger of the Vatican's Nativity Scene.

This year's model - the Vatican revived the custom in 1982 - is inspired by Luke's Gospel.

The story narrates how Jesus' mother, Mary, and foster father Joseph, unable to find lodging, seek a manger for shelter - in the Nativity Scene, a stall covered with wooden planks.

A watchtower set in the city "walls of Bethlehem," described in Luke's Gospel, provide the backdrop, while also shown are a pastoral scene, including statues of shepherds, and simple dwellings like a bakery.

The crib stands next the Vatican's Christmas tree - this year a 33-metre-high spruce from Austria.

Benedict has encouraged Catholics to display their own nativity scenes and Christmas trees. Both are "spiritual" symbols representing Christ's appearance on Earth, according to the German-born pontiff.

On Thursday Benedict is to deliver his Christmas Day blessings and traditional Urbi et Orbi "to the city and to the world" message. (dpa)