French authorities on Saturday uncovered tonnes of weapons and explosives at arms dumps identified by ETA, following the Basque separatist group's vow to disarm after its long and often bloody drive for independence.
ETA had said in 2011 that it was abandoning its armed struggle in the Basque region straddling the Spanish-French border, and announced its "total disarmament" on Saturday.
The group provided France with a list of locations for its arms caches -- a move welcomed by Paris but deemed insufficient by Madrid, which called on ETA to disband completely.
French Prime Minister Bernard Cazeneuve said some 3.5 tonnes of arms, explosives and other materiel had been found in eight locations in the Pyrenees-Atlantiques area close to the Spanish border.
"It's a decisive step towards the end of Basque separatist terrorism," he said.
But Spanish Prime Minister Mariano Rajoy, labelling the group "terrorists", said they could expect no government favours and "still less, impunity for their crimes".
In the southern French border city of Bayonne, thousands of people flooded the streets to mark the historic day with a rally under the theme "We are all artisans of peace".
Many had crossed from Spain's Basque Country, and some in the crowds shouted "Independence!"
Police put the number at 7,000, while organisers said 20,000 had turned out.
"I'm very moved," said Jacques Pavlovski, an 86-year-old former journalist who covered several wars including the bloody ETA years.
"This day is a liberation. The Basque Country must live in peace."
Founded in 1959, ETA has been blamed for the deaths of 829 people in a string of bombings and shootings dating back to 1968. Thousands more were injured.
- Public relations ploy? -
France mobilised nearly 200 police along with bomb disposal experts to secure the weapons, which Paris prosecutors said included hundreds of kilograms of explosives as well as dozens of guns.
French investigators opened a preliminary terrorism investigation on April 4 into weapons use by ETA and will notably probe whether any of the arms found Saturday had been used in killings, according to a source close to the inquiry.
"The dangerous products will be destroyed," Cazeneuve said, adding: "Whether the disarmament is, effectively, total will also be established."
Jean Chalvidant, a French expert who has written several books on ETA, told AFP he was deeply sceptical about the group's disarmament initiative, blasting it as little more than a "public relations ploy".
"The campaign has two goals: the first consists of rehabilitating its disastrous image of a terrorist organisation that killed 829 people, and by extension that of Basque separatism, tarnished by blood and barbarism," the analyst said.
"The second is to move things forward, because no initiative on the issue came from the Madrid government."
ETA had recently been seeking to negotiate its dissolution in exchange for amnesties or improved prison conditions for roughly 350 of its members held in Spain and France, and for current members living under cover.
But both France and Spain have taken a firm line and refused any concessions.
Northern Ireland's Sinn Fein leader Gerry Adams welcomed ETA's "historic" decision to put "its weapons beyond use".
Adams is credited with convincing the IRA to give up their armed campaign, putting an end to more than three decades of conflict between British authorities and republican militants which killed over 3,000 people.
He also called on the French and Spanish governments to "demonstrate generosity in their response" and for Spanish authorities to "address the issue of political prisoners".
- Madrid demands apology -
The list of weapons dumps had been provided via the International Verification Commission (IVC), a group set up to monitor ETA's 2011 ceasefire pledge, though it is not recognised by either the French or the Spanish governments.
Madrid insisted that ETA's latest actions are not enough.
"The only logical response to this situation is (for ETA) to announce its definitive dissolution, to apologise to its victims and to disappear rather than mount media operations to disguise its defeat," the Spanish government said.
The governing conservative People's Party staged an event late Friday in the Basque city of Vitoria in which there was a ceremony for "the protagonists of ETA's defeat". Relatives of ETA victims took part.
The disarming of ETA is "a historical event," Arnaldo Otegi, a former leader of the group's political wing Batasuna, told AFP. But he stopped short of saying whether he thought ETA would disband.
"I believe that ETA must start a debate between militants about its future," added the 58-year-old, who had been imprisoned for a kidnapping.