In a complex speech in the German city of Regensburg the German-born head of the Catholic Church implicitly denounced links between Islam and violence particularly in regard to jihad, or "holy war".
The pope's official spokesman said later Benedict respected Islam but rejected violence motivated by religion.
The explanation, however, failed to quell Muslims' fury.
Middle East expert Antoine Basbous has warned that the region was at risk of serious violence once word spread of the pope's statement.
Mr Basbous said he feared the angry reactions to the pope's comments were increasing and could soon snowball into something similar to the deadly worldwide protests that followed a Danish newspaper's decision to publish satirical cartoons of the Prophet Mohammed in September last year.
Abdel Moneim Abul Futuh, a senior official with Egypt's main opposition Muslim Brotherhood, said he envisaged "an extreme reaction to the pope's words, which harm Islam more than the cartoons because they come from a leader who represents millions of people and not just from a journalist".
Egyptian Foreign Minister Ahmed Abul Gheit "fears that the declarations by the pope did nothing but reinforce calls for a war of the civilizations," said his spokesman Alaa Al-Hadidi.
Among others joining the chorus of condemnation were the governments of Jordan, the ruling Palestinian Islamist militant movement Hamas, and senior Muslim clerics in Iraq, Iran and Lebanon.
"We ask him to apologise this false reading of Islam," said Lebanese cleric Mohammed Hussein Fadlallah, one of the world's foremost Shiite religious scholars.
"We do not accept the excuse of the Vatican that the pope was not targeting Islam and had not intended to engage in a detailed study of jihad (the Muslim doctrine of holy war)," he added.
Outgoing Hamas Prime Minister Ismail Haniya condemned the comments "in the name of the Palestinian people".
"These remarks go against the truth and touch the heart of our faith," Mr Haniya said.
"The pope should revise his comments and stop attacking Islam, which is the religion of more than 1.5 billion people in the world," he added.
Four home-made devices exploded during the day around the compound of Gaza City's oldest church, the Greek Orthodox, although there were no casualties and little damage.
The Jordanian government issued a strongly worded statement condemning the comments and demanded an immediate explanation from the Vatican.
"These statements cause much harm and are rejected," said Religious Affairs Minister Abdel Fattah Salah, quoted by the official Petra news agency.
"We ask the Vatican to immediately explain its position compared to these comments," he added, noting that they came after late Pope John Paul II had done much to improve relations between the two faiths.
Meanwhile, the six-member Gulf Cooperation Council issued a statement in Riyadh demanding a personal apology from the pontiff, saying his remarks were "prejudicial towards Islam and the Prophet Mohammed".
"The gravity of these remarks is that they come from the head of the Vatican at a time of multiple campaigns hostile towards Muslims and does nothing but cause religious fanaticism and animosity between the religions when we need so much dialogue, coexistence and peace," it said.
In Germany, however, Chancellor Angela Merkel came to Benedict's defence saying: "Those who criticise the pope misunderstand the intention of his speech, which was to call for dialogue between the religions.
"The pope clearly took a stand in favour of dialogue, which I personally support and consider necessary and urgent. What Benedict XVI was expressing was his absolute rejection without compromise of any use of violence in the name of religion."
The British Catholic Church explained that the pope's comments were trying to reinforce his message that the world must learn from its past mistakes and learn to live with respect for each others' identity.
"Benedict has made clear ... that Christianity as he sees it is based on love for all humanity, whatever religion," the church said.