Palestinian leader Mahmoud Abbas has invited the Pope to visit Jerusalem and places holy to Christians.
Mr Abbas and the Pope had a 20-minute meeting
During their first meeting at the Vatican, Benedict XVI accepted the offer, but no date has been set.
Jerusalem is a key sticking point in Israeli-Palestinian relations, with Palestinians hoping a future state would include the east of the city.
Israeli President Moshe Katsav met the Pope last month and invited him to visit the Jewish state.
The disputed status of the city of Jerusalem - that is holy to Jews, Muslims and Christians - has always been a matter of interest to the Roman Catholic Church, the BBC's David Willey in Rome reports.
"You will be very welcome in Jerusalem and the holy places," Mr Abbas told the pontiff at the end of a private audience at the Vatican.
"Thank you very much," was the response from Pope Benedict XVI.
One of Mr Abbas' aides - who lives in Bethlehem - also gave then gave the pontiff a document granting the Pope unlimited access to Bethlehem, the town where Jesus Christ was born.
The unresolved status of Jerusalem - the eastern part of which was annexed by the Israelis in the 1967 war - has always been a key issue for the Vatican.
The late Pope, John Paul II, had said he was in favour of the internationalisation of Jerusalem, and this is still official Vatican policy, our correspondent says.
Israel has always refused such a solution claiming jurisdiction over the whole city as the undivided capital of the country.
Palestinians want East Jerusalem to be the capital of their eventual state.