Chancellor Gerhard Schroeder took part in the symbolic act of ground-breaking at the site, which is about the size of two football pitches and will be covered with thousands of pillars representing a graveyard.

However, the controversial memorial will not be completed for several years and critics have suggested it could become a target for neo-Nazi vandals.

Addressing a special session of the German parliament, he said he did not believe that the nation should bear collective reponsibility for events during World War II.

"None of you have committed sin," he said, adding that the children of murderers were not themselves murderers.

But, although his people had suffered the pogroms and even the inquisition, no nation and no system had inflicted so much pain in so short a time.

Stockholm conference

The ceremony in Berlin coincides with the second day of a major conference in Stockholm, aimed at ensuring that the millions who died at the hands of the Nazis are not forgotten.

The three-day conference - attended by more than 20 heads of state and government - aims to focus attention on the legacy of the genocidal onslaught on European Jewry by the Nazi regime in Germany nearly 60 years ago.

On Wednesday, the forum heard repeated calls not to forget the crimes of the Nazi era - nor to be complacent about the threat of the far-right.

The Israeli Prime Minister Ehud Barak said the conference sent out a universal message - that never again should a regime of evil, murder and discrimination on the basis of religion, race or colour be tolerated.

"Although I have forgiven, I have sworn an oath to forget nothing and remember everything," Mr Barak said, opening his address in the Swedish capital in Hebrew, recalling a poem called The Vow.

German Chancellor Schroeder urged better international co-operation in the fight against racism and neo-Nazism.

Anti-democratic forces

Swedish Prime Minister Goran Persson, opening the conference, said people must learn from Nazi crimes and keep anti-democratic forces in check.

His decision to call the conference followed research findings that 10% of Swedish schoolchildren did not know about the Holocaust.

The forum also coincides with the trial of three Swedish neo-Nazis for the dissemination and selling of extreme-right propaganda.