We have fought too hard and too many have died for America to ever leave Kuwait on its own

George Bush, former US president

"We stand together again in that cause today as coalition members still pledged to guard against aggression," he said.

Meanwhile, an Iraq still ruled by Saddam Hussein mocked Kuwait's festivities as a celebration of American occupation.

Iraqi newspapers called the ceremony a celebration of shame, and said that Kuwait had become a forward base for US aggression against Baghdad.

Iraq not the enemy

Mr Powell said the US had no quarrel with the people of Iraq, only with their leader.

Mrs Thatcher met Kuwaitis who had lost relatives

A US-led coalition forced Saddam Hussein's troops out of Kuwait on 26 February 1991 after a massive air bombardment and a short land battle.

Hamid Said, Iraq's deputy information minister, said the festivities, coinciding with the recent air raids near Baghdad, "marked an escalation against Iraq because of its support for the [Palestinian] intifada... such an escalation threatens an explosion".

But Mr Powell justified the liberation of Kuwait and said that Saddam Hussein's "sting" had been removed.

"We did exactly what President Bush said: the aggression did not stand and Iraq is trapped in a prison of its own making," he said.

Miliitary exercises

As a reminder of Kuwait's tense relations with its northern neighbour, Iraq, the US army on Sunday staged a demonstration of its fire-power out in the desert, with soldiers from the Kuwait army and UK warplanes also taking part in the exercise.

Former President Bush said the exercises should demonstrate to Saddam Hussein that he cannot reinvade Kuwait.

Kuwaitis still fear their northern neighbour

"I wish he had been to see this. It might not have toned down his rhetoric but if he had any idea that he can fight again and do anything different than get clobbered in the sands of Kuwait, he would have changed his mind", Mr Bush said.

US officials admitted privately to the BBC that the exercise was a typical joint manoeuvre to avoid any future attack against Kuwait.

Although Kuwait's armed forces believe the likelihood of an attack by Iraq on the anniversary of the end of the Gulf War is slim, they are on alert.

Missiles deployed

Patriot anti-missile missiles have been deployed in Kuwait City, covering the country's main Bayan Palace and the new US embassy, where some of the Gulf War commemorations were held.

Kuwaiti chief of staff Lieutenant General Ali al-Mu'min told the BBC that over the last 10 years, Kuwaitis had been hoping that tensions with their northern neighbour would ease.

But instead, he said, Iraq was maintaining huge military forces across the common border, with two divisions of troops just 20 minutes drive from Kuwait.

About 4,500 US troops are based in Kuwait, together with squadrons of US and British warplanes that regularly patrol the skies over southern Iraq.

A defence pact between the US and Kuwait, signed following the Gulf War, was renewed on Saturday.