Afterwards, he moved on to Israel's Yad Vashem Holocaust memorial.
There Benedict said that the suffering of Holocaust victims should never be forgotten, denied or belittled.
"[Their names] are indelibly etched in the hearts of their loved ones, their surviving fellow prisoners and all those determined never to allow such an atrocity to disgrace mankind again," he said.
His comments followed a controversial move to welcome back into the Roman Catholic church a bishop who denied the extent of the Holocaust.
Benedict has also been criticised over the Vatican's move to beatify Pope Pius XII - pope during the time of the Holocaust - whom many Jews blame for not speaking out against the Nazis during the second world war.
Many Holocaust survivors are also sceptical of the German-born pope's brief time in the Hitler Youth Movement.
Rabbi Israel Meir Lau, chairman of Yad Vashem's board of directors and a former chief rabbi of Israel, said he found the speech lacking.
"There is a clear difference between 'killed' and 'murdered.' There is a difference between saying millions in the Holocaust and saying six million. The word six was not said,'' he told Israel TV.
"There was certainly no apology here."
Benedict called earlier on Monday for the establishment of an independent Palestinian state, putting him at odds with the new Israeli government, which has repeatedly avoided committing to a two-state solution in peace talks.
Jacky Rowland, Al Jazeera's correspondent in Jerusalem said: "In terms of real politick he [Benedict] doesn’t have a very big say. The US alone is able to put significant pressure on Israel in terms of what kind of concessions it is able to make to the Palestinians.
"He does have a certain amount of independence from political or economic constraint which enables him some influence, but it is not the same kind of direct influence that the US, UN or EU would have," she said.
Palestinians too were angered after he met Israeli leaders whom they accuse of killing civilians during the war on Gaza earlier this year.
Al Jazeera's Sherine Tadros in occupied Palestinian East Jerusalem, said: "Already there are Palestinians, both Christians and Muslims, that have said to us here that they are concerned that he is spending his first day in West Jerusalem.
"Israeli protocol dictates visiting West Jerusalem and Israeli dignitaries, and shaking the hand of foreign minister Lieberman, Peres and Netanyahu - right-wing politicians who back the recent Israeli war in Gaza that killed 1,400 Palestinians.
|The pope has been criticised for meeting Israeli leaders who supported the Gaza war [AFP]
"So, certainly some see it as bad taste for the pontiff to be visiting West Jerusalem and shaking the hands of these politicians at this time."
Hamas, the Palestinian group that effectively controls the Gaza Strip, described the visit as "misplaced" because "it ignores the suffering of 12,000 Palestinian detainees in the occupation jails, subjected to all kinds of oppression, injustice, deprivation, and torture".
The group said Benedict's pilgrimage to the Middle East "beautifies the image of the occupation and weakens the chances of pursuing its leaders as war criminals who committed massacres and holocausts against the Palestinian people".
Benedict was also criticised for meeting the parents of Gilad Shalit, an Israeli soldier held prisoner in Gaza since Palestinian fighters seized him in a June 2006 raid.
Benedict is due on Wednesday to visit Palestinian refugees living close to where Jesus is said to have been born, a site in the occupied West Bank all but surrounded by Israel's separation wall.
The Vatican has said the visit to the Aida refugee camp near Bethlehem is being made as an act of solidarity with the refugees' suffering, but it will be unpopular with some in Israel.