He also urged Palestinians and Israelis to abandon hate and revenge.
He spoke in front of tens of thousands of Catholic pilgrims in St Peter's Square.
Heavy security was in place following last week's lorry attack in Berlin. The Pope also paid tribute to its victims.
On Syria, the pontiff said the international community must "actively seek a negotiated solution" to the five-year war.
He said Israelis and Palestinians must come together to "write a new page of history" amid heightened tension after Friday's UN resolution condemning Israeli settlements on occupied land.
He also denounced global terrorism, which he said "had sown fear and death into the hearts of so many countries and cities".
Italian police are on high alert during the Christmas weekend. On Friday, they shot dead the man believed to be responsible for the Berlin attack in a shootout in Milan.
Authorities in Rome have banned vans or trucks from entering the city centre, and military jeeps were placed on the roads surrounding the Vatican.
The papal blessing, known as Urbi et Orbi ("To the City and the World"), is delivered annually on 25 December.
During Christmas Mass, held inside St Peter's Basilica the previous night, the Pope said the true meaning of Christmas was being drowned out by materialism.
He, again, spoke of those caught up in violence in Syria, and those that have been forced to leave their homes.
Throughout the past year, the Pope has urged compassion towards refugees, reminding Christians that Jesus himself was a migrant.
Pope Francis called for an end to the fighting in Syria in his Christmas address at the Vatican on Sunday, saying "far too much blood has been spilled" in the conflict.