Francis, 87, told 6,500 people inside St Peter's Basilica: "Our hearts are in Bethlehem, where the Prince of Peace is once more rejected by the futile logic of war".

He added that the "clash of arms today" prevents Jesus from "finding room in the world".

In Bethlehem itself, Mass was held by Palestinian Christians who reflected on the war around them in Israel and Gaza.

The traditional Nativity scene in Manger Square was also surrounded by rubble and barbed wire.

In Vatican City, recalling that Jesus was born during a census meant to reinforce King David's power, the pontiff "the quest for worldly power and might, fame and glory, which measures everything in terms of success, results, numbers and figures, a world obsessed with achievement".

By contrast, Jesus entered the world humbly. "Here, we see not a god of wrath and chastisement, but the God of mercy, who takes flesh and enters the world in weakness," he said.

A pagan deity is linked to "power, worldly success and idolatry of consumerism," the pope said.

"God, on the other hand, waves no magic want; he is no god of commerce who promises everything all at once. He does not save us by pushing a button, but draws near us, in order to change our world from within."

On Christmas Day the Archbishop of Canterbury will use his sermon to highlight the suffering of children caught up in the Israel-Hamas war.

The Most Rev Justin Welby is expected to say "the skies of Bethlehem are full of fear rather than angels and glory", referring to Jesus Christ's birthplace, which is now in the Israeli-occupied West Bank.

He will then compare the turbulent conditions of Jesus's birth with the plight of children today in the troubled region.

"Today a crying child is in a manger somewhere in the world, nobody willing or able to help his parents who desperately need shelter. Or in an incubator, in a hospital low on electricity, like al Ahli (hospital) in Gaza, surrounded by conflict," he will say during his sermon at Canterbury Cathedral.

Also referring to Ukraine and Sudan, Mr Welby will say: "So many parts of the world seem beset with violence."

He will add that a commitment to "serving, not in being served" was needed to resolve problems of climate change, terrorism, economic inequality and "the desperation and ambitions that drive more and more to migration".

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Addressing the King, the Archbishop will suggest the monarch is following the example of Jesus in providing leadership through service.

"Two thousand years later, at a coronation, it seemed natural and right for a king in royal robes to answer a child, 'I come not to be served, but to serve' - and we know it to be his intention, the right way to be a king," Mr Welby will say, having conducted the coronation on 6 May.

The King is set to knight the Archbishop of Canterbury in the upcoming New Year Honours list, according to reports.