One of Pope John Paul II's closest confidants, the new pope is said to share the late pope's affinity for Jews, and is a member of the Vatican's Commission for Religious Relations With the Jews.
The German-born pope has participated in Catholic-Jewish dialogue, and has strongly condemned anti-Semitism. He has called for dialogue with the Jewish community, and said that discussions must start with a prayer for "greater esteem and love toward this people, the Israelites."
He also said Catholics must acknowledge the "gift that they (Jews) have made to us," meaning Jesus.
The Anti-Defamation League said that Ratzinger's European background, in fact, serves to help him understand the impact of 20th century atrocities against Jews.
"From the Jewish perspective, the fact that he comes from Europe is important, because he brings with him an understanding and memory of the painful history of Europe and of the 20th century experience of European Jewry," ADL director Abe Foxman said in a statement.
Ups and downs
However, Ratzinger's relations with the Jewish community have not always been smooth.
He was criticized for a 2000 treatise entitled "Declaration Dominus Iesus," which said non-Catholic religions are "gravely deficient." Some Jewish leaders said the statement pushed Pope John Paul II to beatify Pius IX, the 19th century pope who severely restricted the civil and religious rights of Jews.
Ratzinger has also been criticized for membership of the Hitler Youth organization as a teenager in Germany, and for his service in the German Army during World War Two.
But biographer John Allen has rejected charges the new pope was a Nazi, and has said the Ratzinger family was forced to move out of their home as a result of his father's criticism of Hitler.
Israeli, Jewish reactions
In Israel, Simon Wiesenthal Center director Ephraim Zuroff said, "Membership in the Hitler Youth doesn't disqualify someone from being pope," and said Benedict XVI should be judged by his record since the war.
Zuroff's comments were seconded by Rabbi David Rosen of the American Jewish Committee: "As an adult, he has shown a deep understanding of our concerns," he said.
However, an official government comment from Foreign Minister Silvan Shalom was somewhat more guarded.
"Israel is hopeful that under this new papacy, we will continue to move forward in Vatican-Israel relations and we are sure that considering the background of this new pope, he, like his predecessor, will be a strong voice against anti- Semitism in all its forms,' Shalom said in a statement making a veiled reference to Ratzinger's past.
The World Jewish Congress lauded Ratzinger for providing the "theological underpinning for many of the major advances in Jewish-Catholic relations in the past quarter century."
Learned of evils of racism
The new pope said his experience increased his sensibility towards Jews and taught him firsthand the evils of racism.
He says he "watched the Nazis twist and distort the truth," and that their "lies about Jews, about genetics, were more than academic exercises. People died by the millions because of them."
Christian failure, but no apology
The Holocaust is another example of Ratzinger's up-and-down relations with the Jewish community.
He has called the Holocaust an "atrocity," and said anti-Semitism "produced deplorable acts of violence," including the failure of many Christians to help Jews escape the Nazi party.
Despite the denunciation, Ratzinger angered Jews as a cardinal for failing to apologize for the Holocaust and refusing to accept guilt on behalf of the Church for Catholics' complicity in it.
But he also acknowledged of the failures of Christians to come to the aid of Jews in a 1988 statement, and has also looked to the Holocaust to usher in "a new vision of relations between the Church and Israel."
Andrew Friedman contributed to this report