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Britain's Queen Elizabeth, the Head of the Commonwealth celebrating her Golden Jubilee year, opened the Games to thunderous applause from the 40 000-strong crowd and around 4 000 athletes from 72 Commonwealth nations and territories.
``All of us participating in this ceremony tonight, whether athletes or spectators, or those watching on television around the world, can share in the ideals of this unique association of nations,'' the Queen said.
``We can all draw inspiration from what the Commonwealth stands for, our diversity as a source of strength, our tradition of tolerance...our focus on young people, for they are our future.''
The Queen's speech was contained in a baton lowered into the stadium by an acrobat dangling from a balloon before being passed on to a series of Commonwealth sports figures including Britain's heptathlete Denise Lewis and Olympic rower Steve Redgrave.
But the most poignant moment came when England's soccer captain David Beckham passed it to terminally ill Manchester girl Kirsty Howard who presented the baton to the Queen.
The baton has travelled through 23 countries of the group of largely former British colonies over the past four months before arriving in Manchester on Wednesday.
The colourful ceremony, which was also attended by British Prime Minister Tony Blair, masked a massive anti-terror operation, shadowed by memories not only of September 11 but of a massive Irish Republican Army (IRA) bomb which devastated the city in 1996.
Everyone attending the ceremony passed through strict airport-style security while armed police mingled with the crowd and police helicopters flew overhead.
But police were eager not to spoil the party atmosphere and thoughts of terrorism were far from the minds of the crowd.
Redgrave got the beat started by striking a huge drum in the middle of the stadium. Malaysia, who hosted the last games in 1998, were first into the stadium for the traditional parade of nations with hosts England coming in last.
Small teams like Montserrat -- with only two competitors -- were cheered as much as large ones like Australia's team, which included Olympic 400 metres champion Cathy Freeman.
Part of New Zealand's team surprised the crowd by breaking ranks to perform a Maori haka -- a war challenge -- in front of the Queen as they walked by.
The party mood continued throughout the two-hour ceremony with live performances from British chart-toppers S Club and singer Russell Watson, as well as a spectacular dance, light and fireworks show.
Britain, considering an Olympic bid for 2012, is keen to improve its battered image as a host of major sports events after it was forced to pull out of the hosting of the 2005 world athletics championships because of stadium problems.
As well as the pop music, the opening ceremony, a key part of any Olympics or multi-sports event, contained parts of British life that are famous around the world including marching Grenadier Guards and London black cabs.
Mancunians have taken great pride in hosting the Games, which are the culmination of a six-year billion pound ($1.6 billion) regeneration programme begun after the bombing.
The event runs until August 4.