The weapons were handed over at a colourful ceremony in the hill town of Khagrachari attended by the Bangladeshi Prime Minister, Sheikh Hasina.

The leader of the Shanti Bahini rebels, Jyotirindra Bodhipriya Larma, opened the ceremony by handing his gun personally to Sheikh Hasina to cheers and applause from the audience.

Sheikh Hasina presented him with a bouquet of white roses.

In a speech before the ceremony began, she said: "We want no more blood, no more conflict. We want peace, we want security,"

She told the crowd she believed the rebels would contribute to the development of Bangladesh.

The ceremony was watched by an estimated 25,000 people, including ministers, civil servants, military officers and diplomats.

Another 1,200 rebels are due to surrender by the end of the month.

The conflict has lasted more than 20 years

The peace accord signed last year ends a 22-year conflict in which the Shanti Bahini rebels fought for greater autonomy in the mineral-rich Chittagong Hill Tracts, and against the immigration of Bengali-speaking settlers.

Some estimates say as many as 25,000 people lost their lives in the insurgency.

The peace agreement sets out the future administration for the Chittagong Hill Tracts, establishing three councils for the area with powers to raise taxes and impose law and order.

It also grants the rebels immunity from prosecution, and absolves them from repaying outstanding government loans.

The treaty has been attacked by the Bangladeshi opposition, which says the prime minister conceded too much in order to reach the accord.

The Bangladesh Nationalist Party led by the former prime minister, Khaleda Zia, called a day-long general strike to mark the weapons handover.