The main right-wing opposition party, the anti-communist Fidesz, was to boycott commemorations attended by the governing Socialist party, which was the successor to the Communist party after transition to democracy in 1989.
The move torpedoed efforts to use the 50th anniversary to unite the country in the spirit of the 1956 uprising, when a peaceful student protest spontaneously turned into a mass upheaval against Stalinist oppression.
But on hand to remember the uprising were 18 European presidents and two prime ministers, the kings of Spain and Norway, and the heads of the European Commission and the North Atlantic Treaty Organisation.
They were to witness the ceremonial hoisting of the national flag outside parliament on Monday morning, before heading inside to sign the "Budapest 1956 Freedom Declaration."
Later, they were scheduled to place flowers at the grave of communist reformer prime minister Imre Nagy, the leader during the two weeks of the uprising who was executed in 1958.
Fidesz was to hold a separate commemoration in the afternoon, despite appeals by Hungarian President Laszlo Solyom on the eve of the anniversary to celebrate together in the spirit of the uprising.
"To be selective with the past has become standard since 1989. (Politicians) are not only celebrating apart, they are celebrating different things," Mr Solyom said before Hungarian and world leaders at a ceremony in the Opera building.
"They say there are many 1956s and with this the value and significance of
1956 is devalued. I however say: there is only one revolution of 1956," he said to the audience's applause.
But celebrations were marred earlier on Sunday, when at a state awards ceremony in parliament several recipients, including some veterans of the uprising, refused to shake hands with Socialist Prime Minister Ferenc
Gyurcsany.
It was a symbolic jab at Mr Gyurcsany, who although born five years after the uprising, was the leader of the communist youth organisation in the 1980s.
Also on Sunday, Solyom, elected last year with Fidesz's support, was banned from making a speech at Budapest Technical University -- the intellectual cradle of the uprising.
The university's rector said he had banned the commemoration after a left-wing minister was booed during last year's anniversary.
There were fears that Monday's official ceremonies could also be interrupted by shouts and whistles from a few hundred far-right protestors whom police said could stay on the square outside parliament, a stone's throw from the visiting dignitaries.
They have been protesting there since a mid-September leak of a recording in which Mr Gyurcsany is heard saying he lied to voters about the economy to win re-election in April.
The demonstrations turned into street violence in the first week of anti-government protests. Fidesz has cited Gyurcsany's admission of lies as a factor in its decision to boycott the anniversary of the uprising.
The uprising erupted on October 23, 1956 and was crushed by Soviet tanks on November 4, sealing the country's fate as a satellite state of Moscow until the fall of the Iron Curtain in 1989.
The crackdown resulted in the death of 2,800 Hungarians. A further 12,000 were wounded and 200,000 fled to the West.