Some 5,000 supporters far outnumbered the 200 Palestinian sympathisers who maintained a noisy protest outside the venue throughout. The demonstration — swelled by members of the strictly Orthodox anti-Israel group Neturei Karta — was largely kept in check by a major security operation involving large numbers of police.

However, people arriving at the celebration were greeted by chants of “Death to Israel” and denunciations of Israeli Prime Minister Ariel Sharon.

A brief flashpoint came in the early evening, when police and stewards thwarted an attempt by a militant faction to storm the barriers blocking off the conference centre. Police drew their batons but the danger subsided when leaders of the protest — organised by the Palestine Solidarity Campaign — intervened to cool tempers.

Neturei Karta’s London leader, Rabbi Avraham Grohman, had earlier been cheered by the pro-Palestinian demonstrators when he set an Israeli flag alight.

His actions attracted a stinging rebuke from Chief Rabbi Dr Jonathan Sacks, in an impassioned address to the solidarity rally, the centrepiece of the celebration.

Rabbi Sacks told of the suffering some of his own relatives in Israel because of the terrorist threat.

“What do I say to my sister-in-law, who trembles every time that my brother goes to the local supermarket because it was bombed four weeks ago?

“What do I say to my nephew, aged 18, who a few weeks ago had to go to the funerals of his three closest friends, all aged 18, gunned down by a Palestinian as they were sitting quietly and studying sacred texts?”

Israel had never ceased to call for peace, Rabbi Sacks said. All that it would take for the Palestinians to have their own state would be for Yasir Arafat to put a stop to the violence. “But he hasn’t learnt what peace means.”

Referring to the demonstrators outside, the Chief Rabbi asked: “Where have been the protests at his [Arafat’s] breaking every agreement he made in the Oslo Accords? Where have been the protests that the West has given itself, but not Israel, the right to fight terror?”

One day, historians would ask: “Why was it that human rights organisations and politicians have the right to murder, but Israelis have only the right to die?”

There was also a message read out on behalf of Mr Sharon, calling called for a major increase in aliyah — “one million more immigrants” over the next decade. “This is the time for Jews in the diaspora and in Israel to stand united,” he said.

In Israel, Independence Day took on a more sombre tone than normal. Although flags fluttered on cars and from balconies, many celebrations were cancelled for fear of terrorist attacks.

The major exception was Jerusalem, where a large firework display was staged.

The reflective mood was captured by Ronen Harbouie, manager of the Sbarro pizzeria, where 15 customers were killed in a suicide bombing in August. “I’m 25 years old and I haven’t gone out for fun in the evening for half-a-year,” he said. “This is not a normal way to live. They [the terrorists] control our lives.”

In central Jerusalem, a few hundred people walked around a guarded maze of steel barricades. The most raucous scenes were in Zion Square, where young people sprayed each other with shaving foam as a rock band blared.