The ceremony was held at the stadium of the local soccer club Zagreb, where the National Guards Corps (ZNG) was formed 15 years ago.
After a cannon battery fired gun salutes, an 180-strong echelon carrying the flags of units which fought in the war marched into the stadium, followed by the Army, Air Force and Navy echelons, police units, guards brigades and two echelons with members of units which fought in the war.
The Army Chief-Of-Staff, General Josip Lucic, addressed members of the Armed Forces and guests, offering his best wishes on the occasion of the Armed Forces Day. The names of units which were decorated or commended were read out, after which the guests were addressed by the ministers of the interior and defence, the Prime Minister, the Parliament Speaker and the President of the Republic.
President Stjepan Mesic, who is Supreme Commander of the Armed Forces, said that the decision to establish the ZNG had been made shortly before the historic referendum on independence because it was evident that Croatia would have to defend itself from imminent aggression.
"The war in which we defeated the aggressor is behind. Today we protect national minorities and cooperate with our neighbours," Mesic said, adding that Croatia opposed any form of extremism and intolerance and that it accepted and wanted to share democratic values of united Europe.
Croatia now faces new challenges, particularly in the economy. The country enjoys increasing support in its efforts to join Euro-Atlantic associations and I am confident that it will become a member of both the EU and NATO very soon, Mesic said.
Prime Minister Ivo Sanader said that members of the Armed Forces and the first Croatian president and supreme commander of the Armed Forces, Franjo Tudjman, deserved deep respect, a statement that was welcomed with applause.
"Croatia's politicians and Armed Forces today are aware of changes on the global scene. There are no longer opposed ideologies and strict lines of division, today's threats have a different origin and target and this points to the need to join the Euro-Atlantic community of democracy and security," Sanader said.
Sabor Speaker Vladimir Seks said that the establishment of the ZNG was a historic event and that the decision to establish a Croatian army had proven to be right.
Minister of the Interior Ivica Kirin paid tribute and expressed gratitude to Croatian soldiers killed in the Homeland War. He recalled that 711 members of the Ministry were killed, 3,586 wounded and 44 went missing in the war.
Defence Minister Berislav Roncevic said that the Armed Forces were capable not only of defending Croatia's territory and sovereignty, but of implementing a wide range of missions and tasks.
The entire defence system is going through a permanent process of change with the aim of achieving standards for membership in Euro-Atlantic associations, the minister said.
Along with the state leadership, today's ceremony was attended by numerous former ministers, retired generals, representatives of war veterans' associations and foreign military envoys.
Earlier in the day, high state delegations headed by President Mesic, Parliament Speaker Seks and PM Sanader laid wreaths at the Central Cross in the Alley of Croatian Soldiers and the grave of the former Croatian President Franjo Tudjman at Zagreb's Mirogoj cemetery.
In a brief statement for the press, Mesic said that Croatia now needed to ensure funds to upgrade and buy military equipment. He added that structural changes in the army had been completed and that it had been reorganised and depoliticised.
A military programme was due to be held at Zagreb's sports and recreation centre Jarun.