The festive mood in Sidi Bouzid was tempered somewhat, however, by reminders that democratic change in Tunisia has yet to ease poverty and high unemployment — bread and butter issues that preoccupy many Tunisians and have triggered rioting.

The fuse for "Arab Spring" uprisings was lit when a jobless unemployed university graduate in Sidi Bouzid set himself on fire in despair at police who had confiscated his unlicensed fruit and vegetable cart. He died later in hospital.

Mohamed Bouazizi's death took the lid off simmering anger about poverty, joblessness, corruption and repression. Protests erupted across Tunisia, forcing President Zine Al-Abidine Ben Ali to flee the country less than a month later. Tunisia's revolution inspired other Arabs to rise up against entrenched authoritarian rulers.

In Sidi Bouzid, tens of thousands of people rallied joyfully in the central square, dancing to the rhythms of popular songs despite cold weather, and flags and photographs of Tunisians killed in the uprising decorated the streets.

A ceremony was held to unveil a giant status of Bouazizi, who has become a national hero in the North African country.

"It's a day of joy; Sidi Bouzid has long suffered from neglect and today it has become the capital of the world," said a dancing young man who identified himself as Emad.