By Phuong Nguyen and Francesco Guarascio

HANOI (Reuters) -Vietnam celebrated the 80th anniversary of its declaration of independence from colonial rule on Tuesday, with its largest military parade in decades, unprecedented cash handouts and the release of nearly 14,000 prisoners.

Tens of thousands of people crowded the streets of the capital Hanoi, most of whom were wearing red shirts and holding Vietnamese flags, in a strong show of nationalism in the Communist-run country.

The parade showcased Vietnam's most advanced military equipment, including Russian-made Mi-171 helicopters, Sukhoi Su-30 fighter jets, and domestically produced drones. Thousands of Vietnamese soldiers and military personnel from China, Russia and other countries participated in the celebration.

A separate event at sea featured Russian Kilo-class submarines and frigates.

"We are unwavering in our commitment to defend the independence, freedom, sovereignty, and territorial integrity of our Fatherland, down to every sacred inch of land," Vietnam's Communist Party chief To Lam said as he opened the parade.

National leaders and foreign dignitaries, including top lawmakers from China and Russia, watched the military procession in Ba Dinh Square, where on September 2, 1945, revolutionary leader Ho Chi Minh made his historical declaration of independence.

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The speech marked the foundation of an independent Vietnam after nearly a century of French colonial rule and a brief Japanese occupation during World War II, but the French did not recognise the new country and fought a decade-long war, which ended with their defeat in 1954.

The United States sent a member of its embassy to the parade and U.S. Secretary of State Marco Rubio, in an emailed statement, congratulated Vietnam for the anniversary, noting the country had become "a vital partner in the Indo-Pacific region and a leader in addressing shared global challenges."

"I'm so glad, satisfied, and deeply moved to finally witness the marching troops pass by," said Hoang Thi Huyen, a 42-year-old Hanoi resident who camped on the pavement with her other four family members for nearly two days to secure a spot.

"It was worth the wait. The troops and the fighter jets were amazing," she added.

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Roads in the centre of Hanoi had been blocked for three working days for the rehearsals and the main parade.

As part of anniversary festivities, Vietnam last week announced it would hand out 100,000 dong ($3.80) to each of its 100 million citizens, in an unprecedented package that could cost the country as much as $380 million.

President Luong Cuong also announced last week a major amnesty for 13,920 prisoners who will be released before the end of their jail terms, including 66 foreigners.

(Reporting by Phuong Nguyen, Francesco Guarascio and Khanh Vu; editing by Saad Sayeed)

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