An appropriately coloured haze settled on London's Alexandra Palace on Tuesday night as 1,000 guests ate, sang and danced on Israel's 63rd birthday.

For the Zionist Federation's Yom Ha'atzmaut party, the Ally Pally was transformed by bright blue and white lights, Israeli flags and banners. Party-goers consumed Israeli-style food, including fish balls, pitta, olives and hummus. Cupcakes with miniature Israeli flags were also passed round, as were dates and oranges.

In the foyer, meanwhile, guests browsed market stalls and watched displays of Israeli dancing. And no one was too old to snap up balloon animals and colourful balloon headgear.

Jewish timekeeping was acknowledged in the welcoming remarks of ZF chief executive Alan Aziz, who joked: "The Christian Friends of Israel drove four hours to get here and were still the first to arrive."

As the hall filled up, pupils from the Akiva, Mathilda Marks Kennedy and Sobell Sinai schools delighted the audience with traditional Israeli dancing and songs.

Israeli ambassador Ron Prosor - who is leaving his post next month to become envoy to the United Nations - told the crowd: "I'll miss you. Every year the ZF party is the hottest ticket in town.

"You are with us in the good times, and when we are under attack you stand shoulder to shoulder with us. There is a battle raging throughout the world for our very legitimacy."

He added: "I began my time here with an audience with the Queen and ended it representing Israel at the royal wedding. But Buckingham Palace doesn't compare to Alexandra Palace tonight, celebrating with the ZF royal couple, Alan Aziz and Harvey Rose."

Mr Rose, the ZF chair, reflected: "What Israel has accomplished is incredible. Despite our enemies, despite internal problems and despite a campaign of delegitimisation, it's a world leader in science, technology and medicine."

Party people young and old were brought to their feet by pop star Einat Sarouf - known in Israel as the energy queen - and young singers Adi Bouskila, Gilan Shahaf, Yael Erez and Ido Shavit.

Jan Henning, 31 - a former SOAS Jewish society president who plans to make aliyah in September - said it was nice to have the opportunity to celebrate Israel. "It's not really possible to have events like this at SOAS. It's overshadowed by Palestinian Nakba Day."

Lorraine Rutstein from Southgate said she was a regular at Yom Ha'atzmaut parties. "We're here because we're proud of Israel, of our heritage and we're proud to be Jewish. You have to do whatever you can to show your support."

The One Family charity brought along four Israeli soldiers who have been on a speaking tour of Jewish schools. Sapphire Elimelech, 20, who lost her brother in the Lebanon war in 2006, said: "It's great to be in London for Yom Ha'atzmaut. This is a special year for us - we won't forget it."

Yarden Sa'adia, 19, whose brother was also killed in Lebanon, felt "really excited to be here. We don't have a celebration like this in Israel. There are lots of parties but not one big ceremony."