JERUSALEM (AFP) - Israel on Thursday celebrated its 60th anniversary with displays of military might and parties as Palestinians marked the plight of hundreds of thousands who lost their land to the Jewish state.
Military air shows were among the crowd-pleasers with warplanes going through their paces in sunny skies even as a dark cloud hung over the political future of Prime Minister Ehud Olmert, who is under a corruption investigation.
Crowds also thronged military bases which opened their gates to the public to show off some of the mighty arsenal used by an army well tested in six decades of conflicts.
Israelis were expected to consume an estimated 13 million burgers, steaks, sausages and kebabs during traditional picnics, barbecues and beach parties.
Security forces were on high alert amid concerns that Palestinian militants could use the celebrations to launch attacks, and the authorities imposed a security lockdown on the occupied West Bank.
Palestinian prime minister Salam Fayyad was among the dignitaries who attended the inauguration of a tented "camp of return" in the West Bank town of Ramallah.
The exhibit features displays of photographs and documents dating back to the 1948 creation of Israel which turned hundreds of thousands of people into refugees.
Sixty turbulent years after its creation in the aftermath of the Nazi Holocaust, Israel remains mired in a seemingly intractable conflict with neighbours still technically at war and with the Palestinians still struggling for their own state.
As the Israeli party was in full swing on Thursday, the political establishment braced for a potential shakeup amid uncertainty over Olmert's political future after he was questioned by the anti-fraud squad last Friday.
Olmert, already the subject of three police inquiries into allegations of fraudulent property transactions and abuse of power, has denied any wrongdoing and insisted that he will continue his duties as premier.
The potential scandal has cast a shadow over this year's independence day events, intended to showcase Israel's achievements over the years.
The Jewish state enjoys a stable economy on a par with most Western states, a powerful military, a booming high-tech sector and what is thought to be the region's sole if undisclosed nuclear arsenal.
Israel also enjoys strong support from the United States, whose President George W. Bush will join the birthday celebrations next week.
"Obviously coming to celebrate Israel's 60th anniversary is both symbolism and substance," US national security adviser Stephen Hadley said in Washington.
During his trip Bush will "reaffirm his personal commitment to peace," the White House aide said.
Long-moribund peace talks with the Palestinians were revived at a US-hosted conference in November but have made little progress since then, and to this day neither Israel's capital nor its borders are universally recognised.
Palestinians stayed away from the celebrations and marked the anniversary with commemorations of the "Naqba" -- Arabic for catastrophe. The term refers to the creation of some 760,000 Palestinian refugees after the shock defeat of the Arab armies which invaded immediately after Israel was established.
In the West Bank town of Bethlehem, several hundred people chanting "the right of return is sacred" staged a march around a truck carrying a 10-tonne metal key symbolising the homes Palestinians lost in 1948.
At the same time, thousands of Israeli settlers and right-wing activists staged marches toward a wildcat settlement in the occupied West Bank evacuated in 2005 and another still used by a few dozen Israeli families.
The settlers vocally oppose calls by Palestinians and the international community to freeze all activity in the settlements. The issue is one of the thorniest in efforts to reach a peace deal with the Palestinians.

Israel
Latest headlines from Israel
Copyright © 2008 Yahoo! All rights reserved.