As a choir intoned a Psalm, the pope sprinkled incense on the central altar under Bernini's towering bronze baldachin before opening the service with the traditional wish for peace in Latin: "Pax vobis" ("Peace be with you"). The faithful responded: "Et cum spiritu tuo." ("And also with you.")
Thousands of pilgrims, Romans and tourists packed the basilica for the midnight service. For those unable to enter there were giant screens set up in St. Peter's Square.
Earlier Wednesday, Benedict appeared briefly at his studio window to bless the crowd in the chilly square and light a single candle in a sign of peace.
Before the pope appeared in his darkened studio to light the flame, the Vatican's No. 2 official, Cardinal Tarcisio Bertone, said the gesture was an invitation to all to pray for peace and think of those who are less fortunate.
"I say to all those who are listening, light the candle of peace inside yourself, light the candle of welcoming and understanding that will help you listen and share the cry of the poor and of those who suffer," Bertone said.
The Vatican's Christmas festivities began with the unveiling of the larger-than-life Nativity scene next to the Vatican's largest-ever Christmas tree in St. Peter's Square. Children in red-and-white Santa hats sang Italian holiday hymns as the Vatican's Gendarmeria band played alongside.
On Thursday Benedict delivers his traditional Christmas Day "Urbi et Orbi" speech - Latin for "to the city and to the world" - from the balcony of St. Peter's Basilica, in which he often touches on current events and issues of concern to the Vatican. He then is expected to issue Christmas greetings to the faithful in more than 60 languages.
