Christian pilgrims packed Bethlehem's Manger Square and the Vatican on Christmas Day to pray for a tranquil 2006 and remember those killed in the terrorist attacks and natural disasters that marked the waning year.
Pope Benedict XVI praised signs of hope in the Middle East, while grieving relatives gathered at beaches and mass graves in Asia to pay tribute to the tens of thousands killed when the tsunami crashed into the region's coastlines a year ago.
In rainy Bethlehem, where a February truce brought a downturn in five years of Palestinian-Israeli violence, some 30,000 tourists visited Manger Square outside the fortress-like, 4th-century Church of the Nativity, built over the grottos that mark Jesus' birthplace.
But a reminder that peace remains elusive loomed at the edge of town - a 25-foot barrier that Israel built to keep Palestinian suicide bombers out of Israel.
The Latin Patriarch of Jerusalem, Michel Sabbah, said the wall has turned the West Bank town of Bethlehem into a prison. Yet he struck an optimistic tone in his message at the traditional midnight Mass.
"There seems to be a new Palestinian and Israeli political reality, despite the many complications and hesitations that surround it," Sabbah said.
Worshippers lined up to get in packed Bethlehem churches, a contrast to the sparse turnouts of previous years.
At St. Catherine's Church, attached to the older Church of the Nativity, Andrea Mrakic, a 24-year-old Italian Embassy worker, said his prayers were for all people, "especially here, so that everyone can be in peace, happy with each other and enjoying each other."
Abu Saada says he's traveled from Jerusalem to Bethlehem each year for the past ten, and every year it's special.
"In the last year, something has improved. But the road is still very long," he said.
In the Vatican, Benedict carried on the tradition of the late Pope John Paul II of reflecting on violence and poverty in his "Urbi et Orbi" message - Latin for "to the city and to the world."
"A united humanity will be able to confront the troubling problems of the present time: from the menace of terrorism to the humiliating poverty in which millions of human beings live," he said.
A rainstorm drenched thousands of pilgrims in front of St. Peter's Basilica, but they cheered the pope.
In London, Queen Elizabeth II devoted her annual Christmas address to natural disasters in the past year, especially the tsunami that killed tens of thousands in Asia when it struck Dec. 26, 2004.
"This Christmas my thoughts are especially with those everywhere who are grieving the loss of loved ones during what, for so many, has been such a terrible year," she said in her prerecorded remarks.
Britain's royal family gathered at the Sandringham estate in eastern England with a new addition at the annual festivities - Prince Charles' wife, Camilla. About 1,000 well-wishers lined a path nearby.
It was a sad Christmas in the parts of Asia hit by the tsunami, leaving an estimated 216,000 people dead or missing. Memorials were planned throughout the area Monday.
In Phuket, Thailand, Bernd Sibrava of Vienna, Austria, returned to the same bungalow where he has spent Christmas the last two decades. He had no second thoughts about staying in the same room where he escaped surging water last year by climbing a ceiling fan, but he lost his composure as he recalled friends whose children died in the disaster.
"This is the only time I have a problem, when I think of this," Sibrava said, his voice cracking as tears streamed down his tanned, weathered face.
In the United States, scores of Hurricane Katrina refugees rode out the holiday with relatives scattered across the country.
American soldiers in Iraq woke long before sunrise on a cold, rainy Christmas morning to raid an upscale neighborhood they dubbed "Whoville," after the Dr. Seuss book "How the Grinch Stole Christmas."
"It was appropriate. I did feel like the Grinch," said Pfc. John Parkes, 31, a platoon medic from Cortland, N.Y.
In Australia, thousands celebrating Christmas at Bondi Beach were subject to bag checks and increased police patrols two weeks after racial rioting at a nearby beach.
The atmosphere was livelier in Brazil, where shopping malls staged a 32-hour selling frenzy, bringing in clowns, samba dancers and rock bands to entertain last-minute Christmas shoppers.
There also was plenty of last-minute shopping in the United States, particularly in New York, hit by a three-day strike last week. Many Americans who waited too long to nab "in" gifts were left hoping their children wouldn't notice as they opened packages under the tree.