Israelis flocked to massive celebrations Wednesday evening to mark the 60th anniversary of the founding of the Jewish state following sombre ceremonies earlier in the day for the country's annual Memorial Day.

A youth waves an Israeli flag late Wednesday as fireworks explode in the sky over Rabin Square in Tel Aviv during a ceremony to mark the 60th anniversary of Israel. (Lefteris Pitarakis/Associated Press)

The jubilation over Israel's 60th Independence Day comes amid heightened tension over potential attacks by Palestinian militants to coincide with the anniversary, as well as a great unease over the country's political landscape, fledgling peace negotiations with the Palestinians and continued fallout of the 2006 conflict with Hezbollah in southern Lebanon.

After sundown, thousands of revellers gathered in central Jerusalem's Zion Square and Tel Aviv's Rabin Square amid a sea of blue-and-white Israeli flags.

NASA astronaut Garrett Reisman, the first Jewish crew member on the international space station, sent a greeting from space to the people of Israel.

"Every time the station flies over the state of Israel, I try to find a window, and it never fails to move me when I see the familiar outline of Israel coming toward us from over the horizon," said the American-born astronaut.

Events included plays, concerts, fireworks displays, sports tournaments, Holocaust memorials and inauguration of a footpath around the Sea of Galilee.

Sirens of remembrance

Israelis stand still in a Jerusalem cafe as a siren wails at 11 a.m. Wednesday, the annual memorial day for Israel's fallen soldiers and civilians killed in fighting and militant attacks. (Sebastian Scheiner/Associated Press)The festivities countered a solemn annual tradition that Israelis marked earlier in the day — Yom Hazikaron.

At 11 a.m. local time, sirens wailed in cities and towns across Israel, bringing daily life to a halt as drivers got out of their cars to join pedestrians in standing at attention for two minutes of silence.

The Memorial Day events are held in recognition of the 22,437 Jews who have died in conflicts and militant attacks since 1860, the year Jews first began settling in neighbourhoods outside the walls of the Old City of Jerusalem, according to Israel's Defence Ministry.

Radio and TV programming were interrupted for the two minutes. Schools held memorial services, the Israeli flag flew at half-mast and places of entertainment, such as movie houses and restaurants, were closed.

At 8 p.m. local time, Memorial Day wound down with a traditional torch-lighting ceremony at Jerusalem's Mount Herzl Military Cemetery.

"This special day wipes away our divisions. The feeling of unity and shared destiny is stronger than ever," Prime Minister Ehud Olmert said in a morning ceremony at Mount Herzl. "Memorial Day is a sad day, but free of any disagreements and very Israeli."

Olmert under fire

Amid the fireworks, barbecues and celebrations, many Israelis have been captivated by rumours swirling around Olmert over further allegations of corruption and another fraud investigation.

A sweeping publication ban has been ordered in the case, but speculation is rampant that the latest allegations could force the beleaguered Israeli politician to resign as early as next week, the CBC's Peter Armstrong reported Wednesday from Jerusalem.

"Those events involving the prime minister and his political future are very much overshadowing all of these events," Armstrong said. "Olmert has survived these kinds of investigations and scandals before."

While the day of remembrance is respected nearly universally among Jewish Israelis, some ultra-Orthodox Jews who oppose the Jewish state on religious grounds and Palestinian pedestrians continued about their business as sirens went off in Jerusalem.

After the evening's torch-lighting ceremony, Israelis will shift gears and begin celebrating Israel's Independence Day and 60th anniversary, according to the Hebrew calendar. The festivities continue into Thursday.

Palestinians mourn 'day of disaster'

At the same time, Palestinians were planning to mark on Thursday the anniversary of what they call the Naqba — the "catastrophe" or "day of disaster." On May 15, they'll mark the day of defeat of Arabs and displacement of Palestinians in Israel's 1948 war of independence.

Earlier in the day, Israeli tanks and bulldozers rumbled through the southern Gaza Strip and aircraft struck a series of targets. One militant was killed and at least 14 Palestinians, one a civilian, were wounded in the fighting, according to Palestinian witnesses and medical officials.

Israeli forces routinely enter the Hamas-controlled Gaza Strip in incursions aimed at curbing militant rocket attacks on southern Israeli towns.

On Wednesday, Olmert expressed hope that the decades of conflict between Israel and Palestinians could end with a peace agreement.

"There is nothing we desire more than to end the conflict with our neighbours, and there is nothing that would benefit both sides more than the end of the conflict," he said.

Haim Tzemah, the father of an Israeli soldier killed in the 2006 conflict with Hezbollah guerillas in Lebanon, said bereaved families do not need the day to remember their loved ones.

"We remember him every minute, every hour, every day, all the time," he said.

"It is a national day in which the society in Israel does its soul-searching, and looks back and sees the price we paid to get here. And we paid a very, very, very heavy price, the heaviest you can pay," he said.

With files from the Associated Press