Pope Benedict XVI is marking New Year's Day at a Mass in St Peter's Basilica on a day the Vatican dedicates to world peace.

The Pope in his homily today says educating young people about fundamental values and virtues is the key to securing a future of hope.

Pope Benedict praised young people, saying that by their nature they are open to dialogue and mutual respect. He cautioned that there is a risk that social realities can lead them to be intolerant and violent. But he predicted they will become "builders of peace" if properly educated.

The pontiff spoke of "shadows that obscure the horizon of today's world," but did not mention specific conflicts or the economic crisis afflicting many countries.