A very challenging question to answer, but I'll try to summarize the main points. Vatican City was in a very difficult position during the Second World War. The Lateran Pact had essentially granted independence to Vatican City, and the world community had recognized this independence. However, the pact had in fact been authorized by Mussolini, and this put the Pope (and the Church, to a lesser extent) in a very difficult position. Let us also consider the fact that the Church had as many problems with Bolsheveism as it did with Fascism and Nazism and that Fascism, of the three major "anti Democratic" political systems in the world at the time, actually permitted freedom of religion (something Communism and Nazism did not do). At any rate, the military reality of the situation should be analyzed. Vatican City was surrounded by the capital of one of the three major Axis powers (Rome, Italy). To announce war for the Allied cause would have very likely resulted in the destruction of the Vatican, from one point of view. Of course, the corallary to this is a double edged sword. First, as of the end of the "Prisoner in the Vatican" era with the signature of the Lateran Pact, the Church had officially renounced taking up arms against foreign nations. On the other hand, the Church saw itself as a spiritual institution and then (as it continues to do today) renounced violence for any cause except self preservation. That said, the Vatican did (and continues to) maintain its own military force - the Swiss Guard, which is one of the most highly trained such forces in the world (they use more than just the Halberd, and are currently trained in NATO and WARPAC small arms, anti-terrorism, etc.). While certainly not as sophisticated as they are today, the Swiss Guard of the Second World War might well have put up enough of a fight to gain the moral support of the world and a considerable proportion of Catholics living in Axis countries. It has been convincingly argued that the Pope siding with the Allies publicly might well have resulted in the defection of large numbers of Bavarian, Eastern European, and Italian Catholics to the Allied side. That said, such an action might well have resulted in the needless massacre of everything in and around Vatican City... Ultimately, the Church did play a role in the war. While attempts to broker peace were fairly limited, the Church did manage to smuggle several thousand Jews out of the worst areas of the holocaust, Vatican consulates sheltered several hundred more, and even the Vatican itself sheltered many Jews. In fact, the Germans did attack the Vatican during their takeover of Rome. It was found that armor piercing shells could not crack the thickest protective walls of the city, and the Nazis chose to besiege and intermittantly harass the Vatican politically. Meanwhile, the a handful of lucky Italian Jews sought (and recieved) refuge within the walls of the Vatican. A number of Catholic Cardinals, Bishops, Priests, and Nuns were also actively involved in condemning the Holocaust from the pulpit and many (including the future Pope John Paul II) actually fought in the underground movements. In the late 1990s, Pope John Paul II publicly apologized for the failure of the Church to save more innocent lives by publicly condemning the holocaust. This was a controversial move, both with those who felt that the Church had not been given credit for the lives it did save, and with those who felt that the Church got off "too easy". Ultimately, the Church was not a holocaust enabler, from the perspective of history. It was, however, more interested in self preservation during the war than it was for calling for crusades against Nazism...