Washington  - Hundreds of thousands of people flocked Sunday to Washington's memorial-laden National Mall park, celebrating the inauguration of Barack Obama at a two-hour concert where the next US president addressed the crowd.

The star-studded lineup for the free, public show on a freezing afternoon under cloudy skies featured performances by Beyonce, Bono, Bruce Springsteen and Stevie Wonder, but the real star of the day was no singer.

Obama, 47, will be sworn in Tuesday as the 44th US president - and the first African-American elected to the office. The party started Sunday afternoon with the concert at the Lincoln Memorial, the first of a series of festivities leading up to the presidential oath of office on the Capitol steps.

"I drove 18 hours to be here for this historical event and wouldn't miss it for anything, because I didn't think this would happen in my lifetime," said Maxine Anderson, 45, an African-American from New Orleans, Louisiana, accompanied by her three sisters.

The revellers braving the cold weather hollered, chanted slogans and cheered Obama's messages of hope and change, with the country facing its worst economic crisis in decades and a long list of challenges abroad, including wars in Iraq and Afghanistan.

Obama appeared near the end, after U2's Bono sang In the Name of Love and City of Blinding Lights, which was Obama's campaign song. The president-elect received a huge ovation when he arose, waved to the crowd and strode to the podium.

"I won't pretend that meeting any one of these challenges will be easy," Obama said. "It will take more than a month or a year, and it will likely take many. Along the way, there will be setbacks and false starts and days that test our fundamental resolve as a nation."

Among the speakers during the day were actors Tom Hanks, Forrest Whittaker and Jamie Foxx.

People gathered early Sunday along the reflecting pools at the footsteps of the monument that enshrines Abraham Lincoln, the president who freed the slaves, and the spot where Martin Luther King Jr gave his landmark "I have a dream" speech. The mall was filled with jumbotron video screens, banners and news media booths, as well thousands of portable toilets.

Euan Collins, who arrived Saturday night from his native Britain to join the festivities, was among the many who came early to stake out spots ahead of the concert.

"This is the American election, which has certainly touched Britain," said Collins, 28. "And you know I'm also here for this bloody huge party."

Earlier, Obama and vice president-elect Joe Biden placed a wreath at the tomb of the unknown soldiers at Arlington National Cemetery outside Washington, after arriving Saturday night following a train tour of stops to engage supporters in Philadelphia and Baltimore.

The concert foreshadows the inauguration ceremony at the Capitol building, which is expected to draw at least 2 million onlookers amid unprecedented security, which was already being felt across Washington days ahead. But there were plenty at the mall Sunday ready to celebrate.

Delores Hardy, 68, of New Jersey came to bring Obama's message of hope back to her job at a detention facility for juvenile delinquents.

"Barack Obama really inspires me and enables me to bring hope to the kids at my centre," she said. "I'm here to see the fulfillment of Martin Luther King's dream and carry this message to my kids."

Alison Beck, a 34-year-old American teacher who works in Britain, said she regretted not being at home for election night on November 4, so she decided to attend Obama's inauguration.

"Being out of the country for the election broke my heart, and the inauguration gave me a reason to come home," she said.

During country and Western singer Garth Brook's rendition of Shout, one woman in the crowded danced while wearing a US flag as a cape, while dozens of people climbed trees on the park-like to gain a better view, hundreds of metres away from the stage.

Despite the crowd's size and onlookers eager for a glimpse of Obama, concertgoers maintained the celebratory spirit of the event, singing and clapping as people politely moved through the crowd.

Obama, his wife, Michelle, and their daughters Malia, 10, and Sasha, 7, watched from a glass-enclosed, heated box beside the stage.

All four danced as Stevie Wonder performed Higher Ground, and the president-elect sang along to the folk classic This Land is Your Land.

Amid the inaugural euphoria among Obama supporters for a change in government, and the broadly felt pride in a historic social breakthrough, not everyone was optimistic about the new president's prospects in office.

"Obama's been set up to fail," said 43-year-old Brazilian Raoul Cota. "After Tuesday, once the love dies, he and the American people will face very real problems."

Obama and his top aides have spent more than two months since the election trying to build public confidence and carry the momentum from the election to the White House. They plan to begin quickly tackling the recession, which wiped out nearly 2 million jobs last year.

Obama wants lawmakers to authorize more than 800 billion dollars in spending on infrastructure and other economic stimulus measures that he says can preserve or create up to 3 million jobs and spark an economic turnaround.

Obama will will also be trying to fulfil campaign promises to end the war in Iraq and intensify US efforts against the Taliban in Afghanistan, but will also be dealing with a Middle East peace process shattered after three weeks of fighting in the Gaza Strip between Israel and Palestinian Hamas militants.

Obama has mostly kept quiet on the Gaza conflict, not wanting to break his pledge of "one president at a time" by weighing into international issues while departing President George W Bush is still in office.

Monday, which is the annual holiday in observance of Martin Luther King Jr's birthday, has been designated by Obama for a national "call to service." (dpa)