VATICAN CITY, Dec. 25 (AP) - Invoking Christmas peace in a world made fearful by terrorism, Pope John Paul II on Wednesday urged joint efforts to snuff out the "ominous smoldering" of conflict in the Middle East, keeping up the Vatican's campaign against war in Iraq.

On a drizzly, gray morning, thousands of tourists and pilgrims streamed to St. Peter's Square to hear the pontiff deliver his annual "Urbi et Orbi"--or "to the city and to the world"--Christmas Day message.

They screamed and clapped in delight when John Paul, wearing gold-colored robes, was driven in a white, open-topped vehicle through the square, which was made festive with a life-sized nativity creche and a towering Christmas tree. He reflected on the risk peace faces on the day celebrated as Christ's birthday in Bethlehem.

"From the cave of Bethlehem there rises today an urgent appeal to the world not to yield to mistrust, suspicion and discouragement, even though the tragic reality of terrorism feeds uncertainties and fears," John Paul said, looking frail as he sat in a chair under a canopy on the central steps in the square outside of St. Peter's Basilica.

Without naming any countries, John Paul singled out two places in urgent need of peace-builders from all religions: in the Holy Land, "to put an end once and for all to the senseless spiral of blind violence, and in the Middle East, to extinguish the ominous smoldering of a conflict which, with the joint efforts of all, can be avoided."

Although he didn't name Iraq, his remarks echoed comments in recent days about Iraq by top Vatican officials, who were reiterating Church teaching that "preventative" war is not considered a justifiable cause to take up arms.

Washington insists Iraq is harboring weapons of mass destruction and has been lobbying for support for a possible attack.

In its Christmas Day edition, the Vatican's newspaper, L'Osservatore Romano, ran a banner headline: "Humanity can win the 'battle' of peace."

The Vatican fears the war on Iraq could unleash an anti-Christian crusade in the Muslim world.

In apparent reference to the turmoil that has rocked Argentina and Venezuela, John Paul said that in Latin America, as well as in Asia, political, economic and social crises were disturbing the "serenity of many families and nations." "May humanity accept the Christmas message of peace!" John Paul declared.

Africa's famines and "tragic internal conflicts," John Paul added, were also worrisome. He said that on that continent, "here and there signs of hope are present," although he didn't elaborate.

Renovation work on the basilica's central balcony forced the pope to break with tradition and deliver his Christmas message from the square instead of from the balcony.

Bowing to illness, John Paul, now 82 and very frail, gave up another tradition a few years ago. He no longer says midmorning Mass in the basilica before delivering the message.

However, summoning up a forceful voice, he read out Christmas wishes in 63 languages, ranging from Arabic to Hebrew, from Korean to Swahili, from his native Polish to Spanish, smiling at the cheers that went up as pilgrims heard their own language.

Since he leads Christmas Eve Mass at a midnight service in the basilica, his doctors and aides decided that celebrating a second Mass for the public would be too taxing on the pontiff's stamina and that he needed more time to rest.

Early Wednesday, John Paul struggled through much of the Midnight Mass as he stood at the central altar of the packed basilica.

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