Benedict was in Lebanon as part of his three-day visit to the Middle East.
"Religious freedom has a social and political dimension, which is indispensable for peace," the pope said.
When he arrived in Lebanon Friday, the pontiff said he came to the region as "pilgrim of peace," Voice of America reported.
His visit came as anti-American protests spread across the region over a film produced in the United States denigrating the Prophet Muhammad.
People cheered Saturday as the papal motorcade went to the presidential palace, where President Michel Suleiman greeted the pope, The (Beirut) Daily Star said.
Benedict said only by "rejecting revenge, acknowledging one's faults, accepting apologies without demanding them, and, not least, forgiveness ... can there be growth in understanding and harmony between cultures and religions."
He criticized religious fundamentalism as a "falsification of religion."
Suleiman said Christians were key in achieving democracy, the Star reported.
"Democracy ... cannot be achieved if there is no involvement of the Christian component," Suleiman said.
Suleiman and Pope Benedict planted a cedar tree at the palace.