The Pope made his comments Saturday during a mass to dedicate a new altar at Sydney's St Mary's Cathedral. But activists insisted mere words wont do. They wanted concrete action including monetary compensation to victims.
The Pope said, "Here I would like to pause to acknowledge the shame which we have all felt as a result of the sexual abuse of minors by some clergy and religious in this country," he said.
"Indeed, I am deeply sorry for the pain and suffering the victims have endured and I assure them that as their pastor I too share in their suffering.
"These misdeeds, which constitute so grave a betrayal of trust, deserve unequivocal condemnation.
"Victims should receive compassion and care, and those responsible for these evils must be brought to justice.
"It is an urgent priority to promote a safer and more wholesome environment, especially for young people."
The Pope is in Australia to participate in the World Youth Day festival.
Hetty Johnston, Executive director of the child sexual assault advocacy group Bravehearts, applauded the Pope for his apology to people, but insisted other steps should follow.
"The victims should now be properly compensated and the Church needs to deliver all allegations to police for investigation.
"For the victims it's going to be interesting to see if anything changes as a result of those words.
"I believe it will, I hope it will."
Johnston led a vigorous campaign against former Australian Governor-General Peter Hollingworth after a Toowoomba Supreme Court heard he had done nothing as Anglican Archbishop of Brisbane to alert parents of a girl abused by a boarding master at a church school.
The pressure of the campaign led to his resignation as governor-general in 2003.
More recently she was outspoken against photos of naked child models by artist Bill Henson.
Johnston said she hoped the Catholic Church would follow the Anglican Church's lead, which had improved in "leaps and bounds".
"He is the leader of the church and we hope this will filter through the ranks and the Catholic Church can regain the trust of the people," she told ABC News.
"The victims should be properly compensated and the church needs to deliver all allegations to police for investigation.
"If there are any allegations, they need to go straight to police and not be dealt with internally."
Meantime Australian protesters denounced Pope Benedict XVI's antiquated and discriminatory views, holding a contest for a slogan that would most annoy Roman Catholics and chanting: "The pope is wrong, put a condom on!"
The burlesque, boisterous protest by about 300 demonstrators in central Sydney was in sharp contrast to the solemn papal Mass held earlier, and came as tens of thousands of Catholics marched through the city on a World Youth Day pilgrimage.
Inflated condoms floated like balloons above the crowd of demonstrators - some dressed as nuns and others as priests - as they listened to speeches by activists in support of sex education and safe sex practices at Taylor Square.
"It's good that people protest against the pope's homophobia and misogyny," Alex Bainbridge of the Socialist Alliance told the crowd. "We don't want a war against sex, we want a war against sexually transmitted infections. We're here for the people who could be saved if they had adequate sex education and access to condoms."
Police on horseback and on foot patrolled, but there were no signs of trouble.
The demonstrators also held a "most annoying T-shirt" competition, which was judged by the crowd who picked a crude reference to Mary, Christ's mother, as the winner.