At the protest against the Islamic center, speeches were filled with bellicose rhetoric against Islam and against President Barack Obama, who on Saturday told the country not to blame Islam as a religion for the 9/11 massacre.
About 2,000 people cheered as speakers told them that the Islamic center was a covert plan by Muslim jihadists to conquer the United States and erect a monument honoring terrorists.
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"It's a victory mosque they want to build," New Yorker John told AFP, refusing to give his full name.
Shaven-headed members of the far-right British group the English Defense League joined large contingents of current and former US service personnel at the rally, as did Dutch hardline anti-immigrant MP Geert Wilders.
Wilders got a huge cheer when he exhorted the crowd to "draw this line so that New York... will never become New Mecca."
No one burned the Koran at the rally, as an obscure Florida pastor threatened to do this week, triggering worldwide Muslim protests. But one protestor paraded around offering ripped pages from the Muslim holy book as toilet paper.
"The very finest in toilet paper," he said, adding: "Hate makes me strong."
Obama: Islam is not the enemy
Meanwhile President Obama told the nation that Islam wasn't the enemy as somber ceremonies marked an unusually tense anniversary.
Speaking at the Pentagon, Obama addressed the politically explosive domestic debate that has enraged Muslims abroad.
"As Americans, we will not and never will be at war with Islam. It was not a religion that attacked us that September day. It was Al-Qaeda, a sorry band of men, which perverts religion," Obama said.
He urged Americans not to succumb to "hatred and prejudice," and vowed: "Just as we condemn intolerance and extremism abroad, so will we stay true to our traditions here at home as a diverse and tolerant nation."
At Ground Zero, where for the first time reconstruction work is visibly gathering pace, a youth choir opened the ceremony with the national anthem.
Biden: we've come to remember and rebuild
Vice President Joseph Biden and New York Mayor Michael Bloomberg were among those attending the annual ritual of reading the names of all 2,752 people killed when two hijacked airliners destroyed the Twin Towers.
Bereaved relatives held up portraits of their lost loved ones under a perfectly clear sky as they listened to the litany of names read by often tearful survivors and members of the reconstruction team.
"We come not to mourn but to remember and rebuild," Biden said.
At a third ceremony in Shanksville, Pennsylvania, where the fourth hijacked plane crashed into a field, First Lady Michelle Obama and her predecessor Laura Bush addressed relatives of the passengers and crew.
"May the memories of those who gave their lives here continue to be a blessing to all of you and an inspiration to all Americans," Obama urged.
