This event I believe occurred at the Fourth Moscow Conference in 1944:
In 1944, at a time when the Soviet Union bore the brunt of the struggle against Nazi Germany, it was important to convince Stalin that the Western democracies accepted him as an equal. “‘In the world of the future, for which our soldiers have shed their blood on countless fronts”, the British Prime Minister said in his bombastic style, “our three great democracies will demonstrate to all mankind that they, both in wartime and in peacetime, will remain true to the high principles of freedom, dignity, and happiness of the people. That’s why I attach such paramount importance to good neighbourly relations between a restored Poland and the Soviet Union. It was for the freedom and independence of Poland that Britain went into this war. The British feel a sense of moral responsibility to the Polish people, to their spiritual values. It’s also important that Poland is a Catholic country. We can’t allow internal developments there to complicate our relations with the Vatican…”
“How many divisions does the Pope of Rome have?” Stalin asked, suddenly interrupting Churchill’s line of reasoning.
Valentin Berezhkov, Stalin’s interpreter, in his memoirs recounted this.
The response of Pius XII I have been unable to source as to time and place, but it has become immortal: “You can tell my son Joseph that he will meet my divisions in heaven.”