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 honour at a two-hour military parade that kicked off six days of festivities across the north African desert country.

Organisers 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 programme 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 US and its allies for years and is still the subject of controversy.

The US 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 US 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-US 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 honour, trailing smoke in the red, white and green of Italy's national flag.

Armoured 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 harbour, motorised paragliders buzzed overhead and green lasers were fired across the skyline from hotels being built to cater for the influx of foreigners.

Multi-coloured 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 US embassy in Tripoli and the US, accusing Libya of organising 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 ul