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Framed by the marble memorial to Abraham Lincoln and facing a crowd of more than half a million people, Barack Obama delivered a message of hope last night declaring: ‘Anything is possible in America.’

The President-elect was speaking at last night’s conclusion to Washington’s star-studded ‘We Are One’ concert featuring a string of superstar supporters including Bruce Springsteen, U2, Beyonce and Stevie Wonder.

Two days before he takes office as the first black US president, Mr Obama underscored the challenge ahead, saying: ‘Only a handful of generations have been asked to confront challenges as serious as the ones we face right now.’

Beyonce Knowles performs America the Beautiful flanked by stars (from left to right) Jon Bon Jovi, Marisa Tomei, Shakira, Bono, Betty LaVette and Stevie Wonder

Beyonce Knowles performs America the Beautiful flanked by stars (from left to right) Jon Bon Jovi, Marisa Tomei, Shakira, Bono, Betty LaVette and Stevie Wonder

Barack Obama, wife Michelle and daughter Sasha - pictured with Vice President elect Joe Biden and wife Jill - wave to the crowd through bulletproof glass

Barack Obama, wife Michelle and daughter Sasha - pictured with Vice President elect Joe Biden and wife Jill - wave to the crowd through bulletproof glass

But despite an economy in crisis and a war being fought on two fronts in Iraq and Afghanistan, he said he is ‘as hopeful as ever’.

‘Despite the enormity of the task that lies ahead – I stand here today as hopeful as ever that the United States of America will endure – that the dream of our founders will live on in our time,’ he added.

The huge party on the National Mall – which also included Vice-President Joe Biden, actor Tom Hanks and golfer Tiger Woods as speakers – kicked off a dizzying round of lavish balls, concerts and celebrations to mark Tuesday’s swearing-in ceremony.

Crowds gather at the Lincoln Memorial on the National Mall in Washington D.C. for the opening ceremony of Mr Obama's inauguration

Bird's eye view: Crowds gather at the Lincoln Memorial on the National Mall in Washington D.C. for the opening ceremony of Mr Obama's inauguration

Barack Obama speaks in front of the Lincoln Memorial during the inaugural celebration

Barack Obama speaks in front of the Lincoln Memorial during the inaugural celebration

The inauguration has also seen the biggest security operation in history being mobilised.

Washington D.C. is being turned into a fortress city with a 45,000-strong force of police, soldiers and secret service officials.

As the first black President prepares to take office, security chiefs were planning for a range of potential assassination scenarios, from a lone gunman to a terrorist attack.

But for a few days at least, the nation’s worst economic slide since the Great Depression was being glossed over in a marathon of spectacle and tradition that dwarfs any past Inauguration Day festivities.

However there was growing unease last night that the estimated £100million bill for the array of events will be just as historic as Mr Obama’s ascent to the White House.

The grandeur of the presidential coronation has some senior Republicans suggesting the incoming Commander-in-Chief has misread the country’s mood.

U2's Bono, right, and The Edge perform In the Name of Love

U2's Bono, right, and The Edge perform In the Name of Love

Shakira and Usher join Stevie Wonder on Higher Ground

Shakira and Usher join Stevie Wonder on Higher Ground

While the capital came alive with excitement on the eve of the inauguration, the rest of the US remains weighed down with problems at home and abroad.

Mr Obama confronted those fears head-on in his rousing speech last night, saying: ‘Our nation is at war, our economy is in crisis. Millions of Americans are losing their jobs and their homes.

‘I won’t pretend that meeting any one of these challenges will be easy,’ he added. ‘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 resolve as a nation.’

But he said he had faith in a nation that was at its best in times of trial.

The President-elect has been trying to walk a delicate line by mixing celebrity-studded parties like last night’s concert featuring superstar supporters like U2, Stevie Wonder, Bruce Springsteen and Beyonce with more statesman-like appearances.

Mr & Mrs Obama get down to the music during Bruce Springsteen's rendition of The Rising

Singalong: Mr & Mrs Obama get down to the music during Bruce Springsteen's rendition of The Rising

Pete Seeger, centre, and his grandson Tao, left, perform with Bruce Springsteen on This Land is Your Land

Pete Seeger, centre, and his grandson Tao, left, perform with Bruce Springsteen on This Land is Your Land

He kicked off with a train journey on Saturday from Philadelphia to Washington echoing George Washington’s ride from Mount Vernon to New York, where the US capital was then located.

Yesterday, a sombre Mr Obama laid a wreath at the Tomb Of The Unknowns in Arlington National Cemetery on the Virginia side of the Potomac River before going with his family to the Nineteenth Street Baptist Church in Washington, where he and his family were greeted with an ovation.

Mr Obama plans to lead commemorations for slain civil rights leader Martin Luther King today, a national holiday in the US in memory of the iconic churchman who was assassinated in 1968, five years after his famous ‘I Have a Dream’ speech.

Thousands of people braved the cold to listen to Barack Obama

Thousands of people braved the cold to listen to Barack Obama

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It is a poignant anniversary for Mr Obama, who declared it a day of national service and he plans to visit residents living in some of Washington’s poorest suburbs.

Last night, wife, Michelle and daughters Malia, ten, and seven-year-old Sasha joined him at the free inauguration concert attended by a crowd of up to half a million people.

Among the speakers was Martin Luther King III, the son of the civil rights hero, who introduced a video clip of President John F.Kennedy’s famous ‘ask not’ inauguration address.

Last night’s crowd is expected to grow to an unprecedented two million for the Inauguration Day events on the steps of the US Capitol building – more than double the number for any previous president taking the oath.

Actor Tom Hanks speaks during the celebration

Actor Tom Hanks speaks during the celebration

Mr Obama embraces Oscar-winning actor Denzel Washington

Mr Obama embraces Oscar-winning actor Denzel Washington

After a giant parade from the Capitol to the White House, the new president will attend at least ten glitzy official balls around the city, with all eyes on the First Lady’s fashions.

‘No-one is begrudging the president a celebration to mark this watershed event, but people struggling to keep their homes are going to be looking at this and wondering what is going on,’ said one senior Republican analyst.

After George Bush’s election victory in 2004, Democrats urged him to be frugal, pointing to President Roosevelt’s 1945 inauguration when he made a short speech and served guests ‘cold chicken salad and plain pound cake’.

During World War I, President Wilson cancelled all parties marking the beginning of his term in 1917, saying festivities would be ‘undignified’.

Actor Samuel L Jackson addresses the crowd

Actor Samuel L Jackson addresses the crowd

But Mr Obama’s inauguration committee says it doesn’t believe Americans will consider the celebrations excessive.

‘That is probably not the way the country is going to be looking at it,’ said committee spokeswoman Linda Douglass.

‘It is not a celebration of an election. It is a celebration of our common values.’

Stephen Hess, a fellow of the Brookings Institute in Washington, said Americans have always loved a party.

‘We broke away from the Brits and we had something to celebrate then, and we’ve really never stopped celebrating,’ he said.

Mr Obama greets actor Jamie Foxx as singer John Mellencamp and comedian Steve Carell look on

Mr Obama greets actor Jamie Foxx as singer John Mellencamp and comedian Steve Carell look on

‘If anything, Americans need reason to celebrate even more during tough times.

‘That’s why movies starring Fred Astaire and Ginger Rogers were so popular during the Great Depression, just to name one example. People need an escape, they deserve a good celebration, and Barack Obama’s inauguration more than any other gives people a great reason to celebrate,’ he added.

Adding to the price tag is the cost of a massive security operation.

More than 40,000 police, soldiers and Secret Service staff have been given the task of keeping the new president safe. While officials say they haven’t received any credible threats, they aren’t leaving anything to chance.

Organisers even have an army brigade ready to respond to a chemical and biological attack.

Actor Forest Whitaker (left) and golfer Tiger Woods also took the podium

Actor Forest Whitaker (left) and golfer Tiger Woods also took the podium

Actor Forest Whitaker (left) and golfer Tiger Woods also took the podium

Actor Forest Whitaker (left) and golfer Tiger Woods also took the podium

Mr Obama’s inaugural committee has raised about £30 million towards the cost of staging events like last night’s show and they were paid an additional £3 million for the exclusive TV rights to screen last night’s concert and another tonight starring teen stars Miley Cyrus and the Jonas Brothers.

But most of the rest of the costs – including security and transportation – are being covered by the taxpayer.

Although he may not get to bed before 3am after the inaugural balls, Mr Obama plans to make Wednesday, his first full day as President.

He will start Wednesday at Washington’s National Cathedral for the National Prayer Service, which dates to George Washington’s time.

Then he will have to return to the serious business of running the country.

Sheryl Crow teamed up with will.i.am and Herbie Hancock to perform Bob Marley's One Love

Sheryl Crow teamed up with will.i.am and Herbie Hancock to perform Bob Marley's One Love

Mary J Blige and James Taylor also performed at the historic event

Mary J Blige and James Taylor also performed at the historic event

Mary J Blige and James Taylor also performed at the historic event

Mary J Blige and James Taylor also performed at the historic event

Star Wars filmmaker George Lucas was in the crowd, and Oscar winner Queen Latifah spoke from the podium

Star Wars filmmaker George Lucas was in the crowd, and Oscar winner Queen Latifah spoke from the podium

Star Wars filmmaker George Lucas was in the crowd, and Oscar winner Queen Latifah spoke from the podium

Star Wars filmmaker George Lucas was in the crowd, and Oscar winner Queen Latifah spoke from the podium

Source: Daily Mail

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