"Enough with the slaughters. Enough with the violence. Enough with the hatred in Iraq!" Benedict said to applause at the end of his Palm Sunday Mass in St. Peter's Square.
On Thursday, the body of Archbishop Paulos Faraj Rahho was found near Mosul. He had been abducted on Feb. 29.
Benedict has called Rahho's death an "inhuman act of violence" that offended human dignity.
On Sunday, Benedict praised Rahho for his loyalty to Christ and his refusal to abandon his flock despite many threats and difficulties.
He recalled Rahho's death as the Catholic Church opens Holy Week, the most solemn week in the liturgical calendar in which the faithful recall the suffering and death of Jesus Christ.
Benedict said Rahho's dedication to the Catholic Church and his death compelled him to "raise a strong and sorrowful cry" to denounce the violence in Iraq spawned by the war that began five years ago this week.
"At the same time, I make an appeal to the Iraqi people, who for the past five years have borne the consequences of a war that provoked the breakup of their civil and social life," Benedict said.
He urged them to raise their heads and reconstruct their life through "reconciliation, forgiveness, justice and coexistence among tribal, ethnic and religious groups."
The Vatican strongly opposed the U.S.-led invasion of Iraq. In its aftermath, Benedict has frequently criticized attacks against Iraqi Christians by Islamic extremists. Last year, he urged President Bush to keep the safety of Iraqi Christians in mind.
Benedict is due to preside over a memorial service at the Vatican on Monday in honor of Rahho. Typically, the pope only presides over such services when a cardinal dies.
The pontiff's appeal for peace came at the end of his Palm Sunday Mass, which opens the Church's busy Holy Week celebrations. They include the Good Friday re-enactment of Christ's crucifixion and death and the celebration of Christ's resurrection on Easter Sunday.
At the start of Mass, Benedict blessed palms and olive branches with holy water and then processed through St. Peter's Square, wearing intricate, red- and gold-brocaded vestments and clutching a woven palm frond.
In his homily, Benedict urged the faithful to follow God with the innocence and purity of a child's heart.
"To recognize God, we must abandon the pride that dazzles us, that seeks to push us away from God," he said. To find God, he said, "we must learn to see with a young heart, one which isn't blocked by prejudice and dazzled by interests."
A few hundred young people carried massive palm fronds at the start of the procession through the square as part of the lead-up to celebrations for the Catholic Church's annual World Youth Day.
Benedict plans to attend World Youth Day in Sydney, Australia, in July.