The Vatican spokesman, the Rev. Federico Lombardi, said the accusation was "clearly unfounded" and insisted the Church is active in combating AIDS.
The groups published their appeal on the 40th anniversary of the 1968 encyclical "Humanae Vitae" ("On Human Life") -- the document issued by Pope Paul VI that prohibits Catholics from using artificial contraception.
The initiative was spearheaded by Catholics for Choice, a Washington based pro-choice advocacy group, but the letter was signed by organizations from countries across the Americas and Europe.
The ban on contraception "has had catastrophic effects on the poor and weak of the whole world, putting in danger the lives of women and exposing millions of people to the risk of contracting HIV," the letter published in Corriere said.
It urged Benedict to begin a "reform process," saying that, especially in poor countries, the Church was using its influence to block family planning programs and condom distributions.
Lombardi denounced the ad "as paid propaganda for the use of contraceptives."
"Policies against AIDS based mainly on the distribution of condoms have largely failed," Lombardi said in a statement. "The answer to AIDS requires deeper and more complex interventions, in which the Church is active on many fronts."
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