The Vatican has expressed alarm over the burning of Israeli flags by Muslims protesting against Israeli actions in Gaza during Muslim prayers staged outside Italian cathedrals.

Cardinal Renato Martino, head of the Vatican Council for Justice and Peace, said he was not disturbed "by prayer as such." If Muslims wished to come to St Peter's to pray, he would not object, the cardinal said. "Prayer always does good".

However prayers held recently outside the Duomo in Milan and the Basilica of San Petronio in Bologna, with thousands of prostrate Muslims facing Mecca, had been accompanied by flag burning which was not only anti Israeli but anti Semitic, with protesters carrying banners depicting the Star of David alongside the Nazi swastika. "What matters is the spirit in which one prays - and prayer excludes hate" Cardinal Martino said.

Bishop Ernesto Vecchi, vicar general of the Bologna diocese, said the Muslim prayers were "not just prayers but a challenge, not so much to the basilica itself as to our democratic system and culture". Bishop Vecchi suggested the staging of mass prayers outside Christian churches in Italy was a deliberate move "on orders from afar" as part of a strategy of "Islamisation" of Europe.

Monsignor Luigi Manganini, archpriest of Milan cathedral, said he could imagine the Islamic reaction if Christians prayed en masse outside a mosque. Giovanni Maria Vian, editor of L'Osservatore Romano, the Vatican newspaper, said he shared such concerns. "Religions must not be twisted to serve violent ends" he said. "Problems are not solved by war and hate".

Father Antonio Sciortino, editor of the liberal Catholic weekly Famiglia Cristiana, told Corriere della Sera that prayers for peace were welcome, "but what matters in prayer is the intention." The prayer services had been exploited by an "extremist fringe", he said. Abu Imad, the imam of the main Milan mosque, said the demonstration had ended up on the cathedral square "by chance" at the hour of prayer, "so we prayed. There was no provocation or insult intended."

He said that as for the flag burning, "You have to understand the deep anger and sadness of Muslims over what is happening in Gaza". However Mario Borghezio, a Euro MP for the anti immigrant Northern League, which is part of the ruling centre Right coalition led by Silvio Berlusconi, said "The fact that Muslim extremists transformed the cathedral square in Milan into an outdoor mosque constitutes an incredible provocation. The prayer to Allah recited by thousands of fanatical Muslims is an act of intimidation, a slap in the face for the city of Milan, which must remain Christian".

Speaking to pilgrims gathered in St Peters Square to mark Epiphany today, Pope Benedict XVI said he was following the news of the armed clashes in Gaza with growing worry, repeating his warning that hate and rejection of dialogue only lead to war. He encouraged "the efforts of those who are seeking to help the Israelis and the Palestinians to agree to sit down around a table and talk", adding "God supports the undertaking of these courageous builders of peace".

He also appealed to armed groups in the Congo to release children captured for use as soldiers. "I appeal to the authors of these inhuman brutalities to return these young people to their families and give them back a future of security and development which is their right," Benedict said.

The feast of Epiphany, which in the Western Christian calendar marks the visit of the Magi to the infant Jesus, in Italy is also dedicated to children, who receive gifts and sweets from a witch named "Befana", a corruption of Epiphany.The Pope's remarks were preceded by an historical pageant in Via della Conciliazione, the avenue leading to St Peter's Square, staged by groups from Assisi in Umbria and featuring the "Three Kings" or Magi on horseback as well as women dressed as the Befana.