Pope Francis has used his traditional Christmas Day message to call for "peace for Jerusalem" and dialogue between Israelis and Palestinians.
Acknowledging "growing tensions" between them, he urged a "negotiated solution... that would allow the peaceful co-existence of two states".
US President Donald Trump recently announced that America recognised Jerusalem as the capital of Israel.
The hugely controversial move drew condemnation across the Muslim world.
Last week, UN members decisively backed a non-binding resolution that said any decisions regarding the status of Jerusalem were "null and void" and must be cancelled.
Palestinians want East Jerusalem as their future capital, and all countries currently keep their embassies in Tel Aviv.
The Roman Catholic leader gave his Urbi et Orbi speech, which in Latin means "To the city and world", in Saint Peter's Square.
"On this festive day let us ask the lord for peace for Jerusalem and for all the Holy Land," he told the crowd.
"Let us pray that the will to resume dialogue may prevail between the parties and that a negotiated solution can finally be reached, one that would allow the peaceful co-existence of two states within mutually agreed and internationally recognised borders."
Guatemala has said it plans to move its embassy in Israel to Jerusalem, following Mr Trump's announcement.
It joined the US and Israel, and Honduras, the Marshall Islands, Micronesia, Nauru, Palau and Togo, in voting against the UN resolution.
However, 128 countries backed the resolution while others abstained.
Jerusalem is home to sites sacred to Judaism and Islam, and because of its role in the life of Jesus, the city is also one of the holiest places for Christians.
The city's status goes to the heart of the Israeli-Palestinian conflict.
Israel regards Jerusalem as its "eternal and undivided" capital, while the Palestinians claim East Jerusalem - occupied by Israel in the 1967 Middle East war - as the capital of a future Palestinian state.
Israeli sovereignty over Jerusalem has never been recognised internationally and, according to the 1993 Israel-Palestinian peace accords, the final status of Jerusalem is meant to be discussed in the latter stages of peace talks.
Since 1967, Israel has built a dozen settlements, home to about 200,000 Jews, in East Jerusalem. These are considered illegal under international law, though Israel disputes this.