TRIPOLI - Italian aerobatic jets, paragliders with fireworks, dancers and an equestrian fantasia electrified Tripoli on Tuesday night when Libya marked 40 years since a bloodless coup brought Muammar Gaddafi to power.

Venezuelan President Hugo Chavez was Gaddafi's guest of honor at a two-hour military parade that kicked off six days of festivities across the north African desert country.

Organizers said the long-isolated OPEC member wanted to show the world it was open again for business after years of heavy sanctions and show it could be a new gateway to Africa.

Libya has cut support for armed revolutionary groups and made peace with Washington by scrapping a program to build nuclear weapons and paying compensation for bombings and other attacks for which it was blamed by the West.

Gaddafi, Africa's longest-surviving leader, was shunned by the United States and its allies for years and is still the subject of controversy.

The United States and Britain voiced anger at the hero's welcome given to Abdel Basset al-Megrahi, a former Libyan agent freed by Scotland last month from a life sentence for the 1988 Lockerbie bombing that killed 270 people.

At the festivities, pictures of the return of Megrahi to Tripoli were projected on to a giant screen along with images of Gaddafi's 1969 revolution and Libyan achievements.

Libya invited dozens of Western heads of state to the festivities and all but a few declined. The United States said it sent an embassy representative to part of the celebrations.

Many of the guests were African dignitaries invited by Gaddafi who is the current chairman of the African Union.

Foreign companies are back in the former Italian colony searching for oil or vying for contracts to build roads, railways, phone networks and schools.

Chavez swept into Tripoli's landmark Green Square to mix with dignitaries and joke with the press before greeting the veteran Libyan leader, who arrived dressed in military uniform.

The two leaders, known for their anti-U.S. rhetoric, hugged each other and then sat together, flanked by African heads of state including Tunisia's Zine al Abidine Ben Ali and Algerian President Abdelaziz Bouteflika.

GADDAFI'S DAY

Military bands from 17 nations including France, Italy and Australia filed past as the Italian jets zoomed over the Mediterranean in Gaddafi's honor, trailing smoke in the red, white and green of Italy's national flag.

Armored vehicles and trucks laden with missiles trundled past. Tanks kicked up the tarmac under Green Square's floodlights, palm trees and banks of green Libyan flags.

An international dance troupe helped depict 6,000 years of Libyan history, at one point struggling to the top of a mound of sandbags to triumphantly plant Libya's plain green flag.
Security was tight in the Mediterranean port city and the public were kept well away from the action on stage.

Several hundred Libyans gathered by the sea as fireworks burst from platforms in the harbor, motorized paragliders buzzed overhead and green lasers were fired across the skyline from hotels being built to cater for the influx of foreigners.

Multi-colored lasers beamed Gaddafi's face on to the side of an oil tanker that loomed over the docks, a symbol of Libya's growing oil wealth.

Gaddafi was a 27-year-old army signals officer when he took power with a group of fellow officers while King Idris was abroad for medical treatment.

Relations with the West reached a low point in the 1980s.

Demonstrators sacked the U.S. embassy in Tripoli and the United States, accusing Libya of organizing the bombing of a disco in Berlin, bombed Tripoli, killing more than 40 people including Gaddafi's adopted daughter.

Libya retaliated by striking English off school curriculums.

Gaddafi insists his system of grass-roots rule by town hall committee, in which political parties are banned, will ultimately prevail across the world. Critics say the system smothers dissent and is a cloak for authoritarianism.

Photos of Gaddafi were everywhere across the capital and banners draped above the square's Italian colonial arcades read: Libya the Green welcomes brothers and friends.

(Editing by Tim Pearce and Ralph Gowling)

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