Speaking in his yearly "state of the world" address to diplomats from nearly 180 countries and global organisations, Pope Benedict also condemned terrorist attacks against Christians in Nigeria and violence in Mali, where Islamist rebels in the north are seeking to erase a more moderate religious tradition.
The 85-year-old leader of 1.2 billion Roman Catholics said there was no justification for "baneful religious fanaticism" that had turned places of worship into places of trepidation.
He also said the global economic crisis was caused in part by an absolutist view of profit and denounced moves in some countries to decriminalise abortion.
But in his virtual tour of world hot spots, he reserved his toughest words for the civil war in Syria, where the United Nations estimates 60,000 people have been killed in a 21-month-old conflict that shows no signs of a let-up.
Syria is bring "torn apart by endless slaughter and (is) the scene of dreadful suffering among its civilian population", he said. The Pope called for an "end to a conflict which will know no victors but only vanquished if it continues, leaving behind it nothing but a field of ruins".
He urged diplomats gathered in the Sala Regia of the Vatican's Apostolic Palace to push their governments to do everything possible to face "this grave humanitarian situation", telling them political authorities had "a grave responsibility to work for peace".
Global powers have been loath to intervene in Syria for fear of triggering a wider conflict in a volatile region.
The Pope delivered his address a day after Syrian President Bashar al Assad rejected peace talks with his enemies in a defiant speech his opponents described as a renewed declaration of war.
It came as government troops repulsed a rebel attack on a police school in the northern city of Aleppo, killing and wounding opposition fighters, according to Syria's state news agency.
The report did not specify the number of casualties.
The rebels have recently made significant advances, capturing air bases and military installations in the east and around Damascus, the seat of Mr Assad's power.
On Nigeria, the Pope denounced violence by the Islamist sect Boko Haram, who have killed hundreds in their campaign to impose sharia law in the north, targeting a number of churches.
He called for "effective attention of the international community" to the situation in Mali, where a mix of Islamists with links to al Qaeda have carried out amputations to help impose strict Islamic law on a population that has practised a more moderate form of Islam for centuries.
Turning his attention to the economy, the Pope said the global crisis was in part caused "because profit was all too often made absolute" .
He called for a rediscovery of "the meaning of work and proportionate profit". "To that end, it would be well to teach people how to resist the temptations of particular and short-term interests, and to look instead to the common good," he said.
He hoped the UN's recognition of Palestine as non-member observer state would lead to a two-state solution and make Jerusalem "a city of peace and not of division".