The 85-year-old, in his eighth Christmas season since his pontificate, addressed tens of thousands of people in Rome's St Peter's Square.
He used the analogy of good soil to underscore his view that the hope represented by Christmas should never die.
He said: "This good earth exists, and today too, in 2012, from this earth truth has sprung up. Consequently, there is hope in the world, a hope in which we can trust, even at the most difficult times and in the most difficult situations."
He had tough words for Syria, Nigeria and Mali.
He said: "I appeal for an end to the bloodshed, easier access for the relief of refugees and the displaced, and dialogue in the pursuit of a political solution."
Elsewhere, the head of the Irish Catholic Church urged followers to fight plans to allow abortion if a woman's life is at risk. Cardinal Sean Brady said: "I hope everyone who believes the right to life is fundamental will make their voice heard."