Top political and economic leaders kicked off the annual World Economic Forum Thursday, discussing the global economy and international relations amid security so tight that players and pedestrians alike battled long lines and stifling crowds.

Participants on the first of the five-day conference of some 2,700 attendees, meeting in New York in a show of support after the Sept. 11 attacks, expressed cautious optimism that the bruised world economy could rebuild at the end of the year, fueled by a U.S. rebound.

"I believe we will see a significant recovery in the United States in the second half of the year and this will pull the rest of the world with it," said Jacob Frenkel, president of Merrill Lynch & Co Inc. and a former governor of the Bank of Israel, at the heavily guarded Waldorf Astoria Hotel.

"The story of the world this year will be the story of the United States. It is the engine of the world," he said.

The specter of Sept. 11 was everywhere, from the preponderance of discussions on such topics as "The Root Causes of Conflict" and "Restoring Global Confidence" to the more than 4,000 police, U.S. Secret Service agents and private security cordoning off blocks and blocks of the surrounding midtown Manhattan neighborhood.

Streets were barricaded against vehicular traffic, and heavily guarded sidewalks forced pedestrian traffic to a crawl.

Security inside the meeting, held just three miles (5 km) miles from Ground Zero where bulldozers still haul away the rubble of the World Trade Center's twin towers, was intense.

Long lines formed as participants tried to register or waited to hear such luminaries as Microsoft Corp. CEO Bill Gates, financier George Soros, German Chancellor Gerhard Schroeder and Canadian Prime Minister Jean Chretien.

An anxious press corps was caged in a hotel across the street, with little access to the glitterati and power elite save for an electronic messaging system.

"Take it back to Davos," grumbled one attendee, although most seemed good-natured about the snarls and delays.

The forum, which moved to Manhattan for the first time after 31 years in the Swiss ski resort of Davos, is the first major meeting of the world's movers and shakers since the attacks that sparked a U.S.-led war against terrorism.

U.S. President Bush, however, was staying away making Secretary of State Colin Powell and Treasury Secretary Paul O'Neill the highest-ranking U.S. government representatives.

Former New York Mayor Rudolph Giuliani offered opening remarks, saying New York had "absorbed" the attacks that killed almost 3,000 people, but "is still in pain, still in mourning and still in some ways in shock."

Referring to the array of anti-globalization actions and other protests expected, the former mayor declared: "This is a peaceful city ... I expect this meeting to be peaceful."

Outside, police made their first forum-related arrests, handcuffing seven people from ACT UP (AIDS Coalition to Unleash Power), known for attention-grabbing protests against drug manufacturers.

Some 70 practitioners of Falun Gong -- a mixture of Taoism, Buddhism and traditional Chinese physical exercises -- staged a demonstration against the Chinese government's ban on its activities.

Elsewhere a man was charged with criminal mischief for allegedly defacing a door of a Starbucks coffee shop. Seattle-based Starbucks Corp.'s worldwide chain of coffeehouses is a favorite target of anti-globalization protesters.

About a thousand protesters, including AFL-CIO president John Sweeney, gathered outside Gap Inc.'s flagship store on Fifth Avenue, accusing it of running "sweatshops" in developing countries with low wages and poor working conditions.

Violence at the World Trade Organization summit in 1999 brought Seattle to a standstill. Last year, Italian police shot and killed a demonstrator at the G8 Summit in Genoa.

The future of the global economy was high up on the agenda at the meeting, four months after the chilling attacks that dented consumer confidence and worsened a U.S. economic slide.

Economic experts said there were indications the U.S. recession that started last March was ending -- or was already over -- but sluggish growth persisted elsewhere in the world.

Calling the attacks and their economic consequences a mere "detour," Frenkel and other economists said the almost $10 trillion U.S. economic behemoth was well-placed for recovery.

"The fundamentals in the United States are basically very robust," he said.

Economists also said the U.S. economy would be a locomotive for much of the rest of the world, as growth in Europe is slow to pick up and Japan is in a seemingly endless recession.

The Middle East was also on the agenda as Powell was to meet with Israeli Foreign Minister Shimon Peres Friday. Another Israeli official said efforts were being made to set up a meeting between Peres and Palestinian parliamentary speaker Ahmed Korei, who is also known as Abu Ala.

The two were architects of the 1993 Oslo accords and have had recent contacts in an attempt to revive peace efforts.