Victors and vanquished sat side-by-side on Red Square today as President Putin hosted a lavish parade to mark the 60th anniversary of the Allies' victory over Nazi Germany.

More than 50 world leaders, including President Bush, Chancellor Gerhard Schröder of Germany and Junichiro Koizumi, the Japanese Prime Minister, gathered by Lenin's Tomb for an hour-long parade honouring Soviet sacrifices during the Second World War. Britain was represented by John Prescott, the Deputy Prime Minister.

The ceremony, full of Soviet imagery, began with four goose-stepping soldiers dressed in ceremonial green and gold embroidered uniforms carrying a red flag with a hammer and sickle. This was a replica of the banner of the Red Army’s 150th Rifle Division, which was flown from the top of Berlin's Reichstag on May 1, 1945, after the building was seized by advancing Soviet forces.

Soldiers in modern and Second World War uniforms, infantrymen with metal helmets and red flags topped by Soviet insignia, sappers with dogs, tank soldiers with black padded helmets, marched in tight formation, their boots echoing across the cobblestones.

Fighter jets streaming smoke in the Russian blue, white and red tricolor flew over Red Square as soldiers belted out songs from what Russians call the 'Great Patriotic War'. The word victory was emblazoned on the Kremlin wall in different languages - including, controversially, those of the vanquished.

With rain clouds hanging menacingly overhead, Russian authorities sent up 11 aircraft to seed the rainclouds with chemical dispersal agents - a procedure refined for the 1980 Olympics - and the sun broke through just as the parade began.

Mr Putin told the crowd that his country would never forget the debt owed to the tens of millions of Soviet citizens who died to defeat Nazism.

"I bow low before all veterans of the Great Patriotic War," said the Russian leader, describing May 9, 1945, marked in Russia as Victory Day, as "a day of victory of good over evil, freedom over tyranny".

"The most cruel and decisive events unfolded on the territory of the Soviet Union," said Mr Putin. "We know that the Soviet Union in those years lost tens of millions of its citizens. It obligates us to great responsibility and forces us to deeply recognise on what a ... precipice the world stood at that time, what monstrous consequences violence and moral intolerance, genocide and persecution of others, could lead to."

The Moscow celebrations have angered many in Eastern Europe who saw the defeat of Germany as the beginning of their own domination by Moscow. The leaders of two Baltic nations, Estonia and Lithuania, were staying away, angered by Mr Putin’s portrayal of the Soviet Union as a liberator despite decades of occupation.

Mr Bush pointedly balanced his Moscow visit with a trip to the Baltic nation of Latvia, which he celebrated as a young democracy, and a planned stop tomorrow in Georgia, where a new pro-Western leadership is seeking to shed Russian influence.

"This was neither an Allied celebration nor one of nostalgia for Soviet might," said Jeremy Page, Times Moscow Correspondent. "It was an unprecedented international show of respect for the Soviet Union's decisive role in defeating Hitler and for the 27 million Soviet soldier and citizens who were killed in the process.

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