Standing in the cradle of Christianity, Pope Benedict XVI told Palestinians Wednesday he understood their suffering and offered his strongest and most symbolic public backing yet for an independent Palestinian state.

To get to Jesus' traditional birthplace of Bethlehem, Benedict crossed through the towering concrete slabs of the separation barrier Israel has erected to wall off the West Bank's Palestinian areas.

On a visit to a nearby refugee camp, he expressed regret over Israel's construction of the separation barrier. A section of the barrier fortified by an Israeli military watchtower provided a stark backdrop as he spoke. In Bethlehem, he offered a prayer for Israel to lift its blockade of Gaza.

But he also urged young Palestinians to "have the courage to resist any temptation to resort to acts of violence or terrorism." It was his first direct mention of terrorism since he arrived in Jordan last Friday on a weeklong Holy Land pilgrimage aimed at inspiring peace and strengthening frayed ties with Muslims and Jews.

At the Aida refugee camp, the pope said it was understandable that Palestinians feel frustrated.

"Their legitimate aspirations for permanent homes, for an independent Palestinian state, remain unfilled," he said.

Benedict's first visit to Bethlehem since becoming pope took on increased significance as he endorsed the idea of a homeland while standing on Palestinian soil.

"Mr. President, the Holy See supports the right of your people to a sovereign Palestinian homeland in the land of your forefathers, secure and at peace with its neighbors, within internationally recognized borders," he said, standing alongside Palestinian President Mahmoud Abbas.

Benedict's Holy Land pilgrimage was meant largely to boost interfaith relations. But so far, it has been fraught with political land mines. Israelis have criticized the German-born pope for failing to adequately express remorse for the Holocaust, while the Palestinians are pressing him to draw attention to the difficult conditions of life under Israeli rule.

The pope also called for a Palestinian homeland when he arrived in Israel Monday for the five-day visit. Israeli Prime Minister Benjamin Netanyahu, who was in the audience, has resisted international pressure to endorse the idea of a Palestinian state alongside Israel. Netanyahu is to meet the pope on Thursday.

At an open-air mass near Jesus' traditional birth grotto, Benedict delivered a special message of solidarity to the 1.4 million Palestinians isolated in the Hamas-ruled Gaza Strip. He has no plans to visit Gaza.

Israel recently waged a three-week war against Gaza militants that killed more than 1,150 people and badly damaged thousands of homes. The war compounded suffering already caused by an Israeli and Egyptian blockade of Gaza's borders since Hamas wrested control of Gaza two years ago.

"In a special way, my heart goes out to the pilgrims from war-torn Gaza: I ask you to bring back to your families and your communities my warm embrace, and my sorrow for the loss, the hardship and the suffering you have had to endure," the pope told thousands of Palestinians who packed Manger Square, some hoisting Palestinian and Vatican flags and pictures of the pontiff and Jesus.

"Please be assured of my solidarity with you in the immense work of rebuilding which now lies ahead, and my prayers that the embargo will soon be lifted," he added.

In a gesture for the pope's visit, Israel allowed nearly 100 members of Gaza's tiny Christian community to travel through Israeli territory to the West Bank.

Benedict's singling out of Gaza "means that Gaza is in the pope's heart," said George Hernandz, bishop of the Holy Family Catholic church in Gaza City. "This a very courageous speech and we are satisfied."

At the refugee camp, home to about 5,000 people, the pope was critical of Israel's separation barrier.

"In a world where more and more borders are being opened up ... it is tragic to see walls still being erected," Benedict said. "How earnestly we pray for an end to the hostilities that have caused this wall to be built."

Israel says the barrier, which snakes hundreds of miles (kilometers) along the West Bank frontier, is a security measure. But the Palestinians say it is a land grab since it juts into areas they claim for a future independent state, leaving some 10 percent of the West Bank on the Israeli "side."

The pope, who has described himself as a "pilgrim of peace," has been forced to navigate some of the touchiest political issues as he makes his way through Israel and the West Bank — his first visit to the region as the head of the Roman Catholic church.

On Tuesday, the Vatican rallied to his defense, describing him as man of strong anti-Nazi credentials and a peacemaker after Israeli critics said he failed to apologize in a speech at Israel's Holocaust memorial for what they see as Catholic indifference during the Nazi genocide.

The Palestinians want the pontiff to put pressure on Israel during his visit. Before he arrived, Bethlehem residents expressed hope that he would use his moral authority to support their quest for independence.

"Our pope is our hope" read posters hung around the town, which was also dotted with the yellow and cream flags of the Vatican and red, black, white and green Palestinian flags.

While Benedict acknowledged Palestinian difficulties, he stopped short of blaming Israel.

"I know how much you have suffered and continue to suffer as a result of the turmoil that has afflicted this land for decades," he said.

Abbas invoked the concrete separation barrier and the occupation in his greeting to the pontiff.

"In this Holy Land, the occupation still continues building separation walls," Abbas said. "Instead of building the bridge that can link us, they are using the force of occupation to force Muslims and Christians to emigrate."

Christians are a tiny minority among the 3.9 million Palestinians who live in the West Bank and Gaza Strip. In a trend seen throughout the Middle East, their numbers have dwindled as Palestinians weary of occupation seek out new opportunities abroad.

"When he comes and visits us, it gives us moral and material support," said Ramzi Shomali, a 27-year-old electric company worker. "It motivates us to stay in our land."

The pontiff brought several gifts to Bethlehem, including a ventilator for a baby hospital and a mosaic representation of the birth of Jesus. He received a handwritten Gospel of Luke.