Pope Benedict XVI has used his first Christmas message to issue a wake-up call to Catholics and to all humanity.
Addressing thousands in St Peter's Square, the Pope said people of the 21st Century risked becoming "victims of their intellectual achievements".
He decried the "menace" of terrorism, the "humiliation" of worldwide poverty and said pandemics and environmental destruction were dangerous new threats.
Pope Benedict succeeded John Paul II, who died in April.
Thousands of pilgrims, tourists and Romans gathered at a rain-soaked Vatican to hear Pope Benedict speak.
'Fairness and wisdom'
He urged the crowd not focus entirely on the "immense progress" made in science and technology during the previous millennium.
"The men and women in our technical age risk becoming victims of their own intellectual and technical achievements, ending up in spiritual barrenness and emptiness of heart," the Pope said.
His warnings about the series of dangers facing humanity today came ahead of traditional prayer calls for peace and goodwill around the world.
He prayed for those working for peace and against conflict in Africa and Asia, and for harmony in Latin America.
In the Holy Land, Iraq and Lebanon, the Pope said, signs of hope need to be confirmed by action inspired by "fairness and wisdom".
He followed his address with the now-traditional Christmas greeting, delivered this year in 33 languages including Hebrew, Arabic, Chinese and Finnish.
Earlier, celebrating his first Christmas Eve Mass since becoming pontiff, the Pope made a plea for peace in the Middle East.
Calling on Roman Catholics to think of those in Bethlehem, he said: "We wish to pray for peace in the Holy Land."
The pontiff is scheduled to lead an evening service on New Year's Eve and celebrate mass the next day in St Peter's Basilica to mark the Catholic Church's World Peace Day.
As Christmas began, the head of Iraq's Chaldean Christian church prayed for peace in Iraq and elsewhere.
Ceremonies in Baghdad were held before dusk on Saturday in advance of a curfew.
"I do not want to make a distinction between Christians and Muslims, we are all Iraqis," said Emmanuel II Delly.
"A car bomb kills without distinguishing between Christians and Muslims."
In Bethlehem, revered as the birthplace of Jesus, Latin Patriarch Michel Sabbah, the senior Catholic cleric in the Holy Land, said the region was "thirsting for peace".
"God created you not to fear or to kill each other but to love each other, to build and to cooperate together," he told crowds in Bethlehem, where Palestinian leader Mahmoud Abbas was attending his first Christmas Eve service.