The Vatican did not release details of the content of Ahmadinejad's letter, but Iran's state-run IRNA news agency said the note focused on Saturday's U.N. Security Council resolution imposing sanctions on Tehran, in the standoff over Iran's nuclear program.
Benedict and Iranian Foreign Minister Manouchehr Mottaki met briefly after the Pope's general audience at the Vatican's Paul VI hall, the Vatican said.
During the talks, the Pope "reaffirmed the role that the Holy See intends to carry out for world peace, not as a political authority but as a religious and moral one... so that peoples' problems will always be solved in dialogue, mutual understanding and peace," the Vatican said in a statement.
The Holy See and Iran, a Shiite Muslim country, have had diplomatic relations for 50 years. Also attending the talks was Vice President and Head of the Iran Cultural Heritage and Tourism Organization, Esfandiar Rahim-Moshaee.
This month, the Vatican indirectly criticized a conference of Holocaust deniers held in Iran. The Holy See said the Holocaust "was a great tragedy before which we cannot remain indifferent" and which must serve as a warning to people's consciences.
Also this month, Benedict met with Israeli Prime Minister Ehud Olmert, who urged Christians to protest Holocaust denials. Ahmadinejad has called for the destruction of Israel and questioned whether the Nazi genocide of 6 million Jews took place.
On Saturday, the U.N. Security Council decided to impose limited sanctions on Iran for its refusal to cease enrichment of uranium — a process that produces the material for either peaceful nuclear power or warheads.
Ahmadinejad told a gathering in Tehran on Sunday that, whether the world liked it or not, "Iran is a nuclear country."
The Pope has a busy schedule over the Christmas period.
On Wednesday, during a general audience that drew several thousand faithful, Benedict reiterated his call for world peace.
"An ardent appeal for peace on earth, one that can translate in a concrete commitment to build (peace) with our lives: this is the task that Christmas entrusts us with," he told pilgrims.
On Christmas Day, the pope called for an end to violence in the Middle East and around the world.