The festivities, to go on for four days, were designed to highlight the volatile leader's newfound acceptance on the world stage but were clouded by controversy over the release by Scottish authorities of the Libyan man convicted of the 1988 bombing that brought down Pan Am 103 over Lockerbie, Scotland.

Most Western leaders have stayed away.

The Libyan leader, known for outlandish outfits and conducting state business in tents, kicked off the celebrations before dawn - at the very hour his coup began - with a feast at a former U.S. air base.

Gadhafi told the audience that as a young lieutenant he was barred from entering the base by an American soldier.

"I told the soldier: 'You'll see what the future has in store,' " Gadhafi said.

Much international attention, however, was focused not on the festivities but on the early release of Abdelbaset Ali Mohmed al-Megrahi, the only man convicted of the Pan Am bombing that killed 270 people, most of them Americans.

Scottish officials freed him Aug. 20 from a life term because doctors said he has terminal prostate cancer and only months to live. But his release and boisterous homecoming outraged victims' families and U.S. officials.

Intense criticism of Megrahi's release and suspicions it was tied to British oil deals with Libya have sent the British and Scottish governments scrambling to explain.

Yesterday, both governments made public their correspondence on his release.

Some documents showed that British Justice Secretary Jack Straw initially believed Megrahi should be excluded from a prisoner transfer agreement signed between the United Kingdom and Libya, but later changed his mind - saying he did not wish to damage the "beneficial relationship" between the two countries.

"Developing a strong relationship with Libya, and helping it to reintegrate into the international community, is good for the U.K.," Straw said in that letter to Scottish First Minister Alex Salmond.

Straw also cited Libya's voluntary dismantling of its program to build weapons of mass destruction and its renunciation of terrorism.

The Lockerbie controversy was not the only one dogging the celebrations.

Swiss officials said Libya had broken a promise to free by yesterday two Swiss businessmen who have been held for more than a year. Libya detained the two last year after one of Gadhafi's sons was arrested in Geneva.

Swiss police briefly detained Hannibal Gadhafi and his wife at a luxury hotel for allegedly beating up servants. Libya retaliated by severing ties with Switzerland and detaining the businessmen on immigration charges.

Gadhafi, 67, toppled Libya's king in a largely bloodless coup Sept. 1, 1969, and has been at the helm of the North African country ever since.

His erratic tenure has blended a homegrown socialism with Islam in a supposedly government-less state where people rule through local assemblies. In practice, Gadhafi is an autocrat.

The son of modest desert Bedouins, Gadhafi was a 27-year-old army captain when he led a group of officers to power. After the coup, Gadhafi nationalized Western assets, souring relations with much of the outside world.

More recently, the Libyan leader, influenced by another of his sons, has tried to repair his country's image.

He surprised the international community by agreeing to dismantle weapons-of-mass-destruction programs.

The United States restored ties with Libya in 2006 after it agreed to resolve the Lockerbie case in a deal that included paying compensation to the victims' families.

Gadhafi is to make his first visit to the United States this month to address the United Nations.