Ukrainian activist Yana Zhdanova was being held for questioning, with possible charges including carrying out obscene acts in public, insults and theft.
A topless Zhdanova grabbed the Baby Jesus statue about an hour after the pope offered his Christmas blessing Thursday. A Vatican guard immediately covered her with his cape and detained her, while Zhdanova, still clutching the figure, shouted "God is woman."
Vatican spokesman the Rev. Federico Lombardi noted that the incident was being taken seriously both because of the location and the solemnity of the event on which it intruded, saying it aimed to "intentionally offend the religious feelings" of numerous people.
He noted that three members of the Femen activist group had previously targeted the Vatican with another protest last month, baring their breasts, as is the Femen hallmark, in St. Peter's Square to protest the pope's visit to the European Parliament.
"It is therefore correct to proceed with the appropriate rigor against repeated acts that intentionally, repeatedly and severely infringe on the right of the faithful to the respect of their legitimate religious convictions," Lombardi said in a statement.
The Nativity scene incident was the latest in a series of protests by the Ukrainian women's rights movement Femen aimed at the Vatican in recent years, alternatively demanding rights for women and gays, and protesting in favor of abortion. This is the first time any of the activists have been arrested by the Vatican.
