"In a world where more and more borders are being opened up it is tragic to see walls still being erected," Pope Benedict XVI said on Wednesday afternoon in his visit to the al-Aida refugee camp in the West Bank. "How earnestly we pray for an end to the hostilities that have caused this wall to be built," he said.

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The wall, he said could be taken down, if Israelis and Palestinians could remove the walls around their hearts.

"Overshadowing much of Bethlehem, the wall that intrudes into your territories, separating neighbors and dividing families… Although walls can be easily built, we all know that they do not last forever, they can be taken down. First, though, it is necessary to remove the walls that we build around our hearts," he said.

"On both sides of the wall," he said, "great courage is needed if fear and mistrust is to be overcome." The pope called the wall a "stark reminder of the stalemate that relations between Palestinians and Israelis seemed to have reached."

He also urged young Palestinians to "have the courage to resist any temptation to resort to acts of violence or terrorism."

Addressing the assembled crowd, 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.

The pope also used his platform in Bethlehem to endorse the establishment of a Palestinian state. Standing next to Palestinian Authority President Mahmoud Abbas, the pope said: "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."

Abbas' presence at the ceremony in Bethlehem, as well as that of Palestinian Prime Minister Salam Fayyad also gave both a brief respite from the political turmoil in Ramallah over the formation of Fayyad's new government, which was scheduled to have been sworn in yesterday but Fatah officials failed to bridge the existing gaps in time.

'We have 11,000 Shalits'

Residents of the refugee camp presented the pontiff with keys, a recurring Palestinian icon intended to symbolize the homes left behind in 1948. Two young girls, one Christian and one Muslim, who both have relatives jailed in Israel also presented the pope with a letter on behalf of 11,000 Palestinian prisoners.

"Israel has one Shalit, we have 11,000 Shalits," the host of the ceremony said, referring to captive Israeli soldier Gilad Shalit.

Local residents said that they believed that the pope, as a German native, should be particularly sensitive to the issue of separation fences.

A spokesman for the committee charged with preparing the ceremony for the pope's visit said that he hopes today's media coverage raises awareness of the refugee issue around the world.

During his visit to the Palestinian Authority the pope donated 70,000 euro to the residents of the al-Aida camp. Karen AbuZayd, commission-general of UNWRA, said that the money would be invested in building classrooms at the refugee camp's school for boys.

The pope also said that he prayed for Israel to remove the blockade imposed on the Gaza Strip since Hamas seized control of the coastal enclave from Fatah.