PRAGUE, Czechoslovakia (AP) _ Thousands rallied Tuesday in memory of Jan Palach, the student who killed himself to protest the 1968 Soviet-led invasion, and the new president said Palach's hopes for a free country are coming true.

Also on Tuesday, the new non-Communist interior minister announced the dismantling of the secret police, the latest step in Czechoslovakia's peaceful revolution that ended four decades of Communist rule.

The rally in Palach's memory drew President Vaclav Havel, who was arrested last year when he tried to lay flowers in Wenceslas Square to honor Palach.

Havel was sentenced to eight months in prison, released in May and became Czechoslovakia's first non-Communist president in 41 years in December after large anti-government protests.

''Everything that Palach dreamt of and longed for is opening in front of us,'' Havel said.

''When they arrested me in January, I had a feeling that 20 years after Palach's sacrifice, his absolute sacrifice was beginning to gain its value. It was my feeling then, it is my certainty now.''

Palach burned himself to death on Jan. 16, 1969, to protest the invasion by five Warsaw Pact countries of Czechoslovakia that crushed the liberal ''Prague Spring'' reforms under Alexander Dubcek.

Havel's arrest in January 1989 sparked a weeklong wave of street protests in Prague, with baton-wielding police using water cannon and tear gas to disperse thousands.

The protests led to 50,000 Czechoslovak artists and workers signing a petition demanding Havel's release and immediate start of genuine reform.

Another police crackdown on student demonstrators Nov. 17 marked the beginning of the country's peaceful revolution.

On behalf of the Paris-based Jan Palach Foundation, leading members of the Czechoslovak student movement received the annual Jan Palach award presented at the rally by French actor Yves Montand.

''Already today we see that the defeated structure has not surrendered yet and keeps dreaming its crazy dream, hoping to regain power,'' said student Martin Klima. ''By receiving the award we pledge to continue his struggle, to be vigilant and issue a warning.''

The rally took place on Palach Square, formerly known as Red Army Soldiers Square, in front of Charles University, where Palach studied history. After the rally, Havel returned to lay flowers for Palach at Wenceslas Square, where he was arrested last year.

Interior Minister Richard Sacher announced the officers in charge of the central and local branches of the secret police were suspended, their written documents sealed and their weapons confiscated.

''Their further fate will be determined during the ongoing interviews by ... the police force,'' Sacher said without elaborating.

Sacher said that departments dealing with the so-called ''struggle against the internal enemy'' were also abolished.

The work of the State Secret Security bureau, known as the STB, included information gathering on church activists, dissidents, young people, scientists, cultural figures, emigres, and anyone else considered likely to be a threat to the Communist state.

''I want to inform the public about measures that were gradually taken by the new leadership of the Interior Ministry, because there are doubts about this among the public and the media as well,'' Sacher's statement said.

The government in December said the abolition of the STB was one of its goals.

The government also wants the estimated 75,000 Soviet troops to pull out of Czechoslovakia by the end of the year. Talks on the Soviet withdrawal continued for a second day Tuesday in Prague, and officials reported no progress.