A massive effort was needed to prepare the venue

The Associated Press reported at least one man being beaten and dragged away. Police also reportedly punched and arrested a news photographer.

Inside the palace, the concert got under way without incident as the Three Tenors - Luciano Pavarotti, Placido Domingo and Jose Carreras took the stage.

Dramatic lighting

Two giant dragons flanked the stage, and the palace's temples and pavilions were dramatically lighted.

It's great that it will draw positive attention to China, just like the Olympics will

Sun Hang

The crowd cheered enthusiastically as three Chinese sopranos joined the tenors for an encore of the drinking song from Verdi's La Traviata.

Flowers were also presented by a group dressed in elaborate traditional Chinese opera costumes.

"It's great that it will draw positive attention to China, just like the Olympics will... we want the world to hear our voice," said Sun Hang, who was in the audience.

Speaking before the concert, Pavarotti said the performance was the tenors' statement of support for Beijing's bid to host the Games.

"I think Beijing deserves the Olympics in order to be with all the rest of the world, recognised," he said.

Gala event

National leaders including President Jiang Zemin were understood to be attending the event, which was also expected to attract an audience of millions on television.

Crowds outside watched a live feed of the concert

Also on the guest list at the $10m event were former South African President Nelson Mandela and Hong Kong film stars Chow Yun-fat and Jackie Chan.

The concert, held on World Olympics Day, comes three weeks before the International Olympic Committee meets in Moscow to select the venue of the 2008 games.

Beijing's key rivals are Toronto and Paris, while Istanbul, Turkey and Osaka, Japan are also in the running.