The pontiff said he prayed for the success of recent UN resolutions for peace in Syria and Libya.
The Pope also condemned “brutal acts of terrorism”, singling out France, Lebanon, Egypt, Tunisia and Mali.
Thousands of pilgrims turned out to see the address, known as “Urbi et Orbi” – to the city and the world.
Heavy security was in place around the Vatican as crowds lined the streets, as it has been since the 13 November Paris attacks carried out by Islamist militants.
This year also saw ongoing conflicts in the Middle East and Africa, while Europe grappled with record numbers of migrants arriving on its shores.
‘Martyrs of today’
Pope Francis began by noting that “precisely where the incarnate son of God came into the world, tensions and violence persist”.
He went on to urge Israelis and Palestinians to resume direct peace talks, and back international efforts to end “atrocities” in Libya and Syria.
Such acts, he said, “do not even spare the historical and cultural patrimony of entire peoples”, a clear reference to the Islamic State group.
Speaking from the balcony of St Peter’s Basilica, he described Christians being persecuted for their faith as “martyrs of today”.
On the migrant crisis, the Pope said “may God repay all those, both individuals and states, who generously work to provide assistance and welcome to the numerous migrants and refugees”.
He also referenced conflicts in Ukraine, Colombia, Yemen, Iraq, Burundi, South Sudan and the Democratic Republic of Congo.
Celebrating Mass on Christmas Eve, Pope Francis called on Roman Catholicsnot to be “intoxicated” by possessions.