JERUSALEM (AP) _ They danced in the streets, wrapped themselves in flags and marveled at what they had achieved. For Israel's people, Thursday marked a festive finale to celebrations of 50 tumultuous years of statehood.

For Palestinians, however, Israel's anniversary gala was a bitter reminder of their own lack of an independent state. ``This occasion opens old wounds,'' said Palestinian lawmaker Ziad Abu Ziad.

And Israel's internal splits could be plainly seen even as the country celebrated: last-minute arguments among religious and secular Jews threatened to derail the main gala performance, and left- and right-wing activists shouted opposing slogans at a controversial Jewish housing development in Arab east Jerusalem.

The perilous birth of the Jewish state a half-century ago _ the anniversary began Wednesday night by the Jewish calendar, and falls on May 14 by the Western one _ was hailed as miraculous despite pressing present-day problems, including the breakdown of the Mideast peace process.

``Our people have been through a lot of sorrow and persecution, but today is joyous,'' said Eben Hoffman, celebrating the day at Jerusalem's Independence Park.

After the festivities kicked off Wednesday night, thousands of revelers took to city streets to celebrate into the early morning hours. On Thursday, thousands of families headed to beaches and parks, and prayers were held at Jerusalem's Western Wall.

Celebrations were capped with a glitzy song-and-dance extravaganza Thursday evening. ``May God bless those who struggle in their dream,'' Vice President Al Gore, the guest of honor, told the crowd of about 12,000 people in a floodlit stadium.