Yasser Arafat (search) was buried Friday in the place where he spent his last years as a virtual prisoner, seen off in a huge and chaotic outpouring of grief for the man who embodied the Palestinian people's dream of statehood.

Police firing in the air failed to restore order as the tens of thousands of mourners rushed toward the coffin, struggling to be close to their leader — hailed as a Nobel Peace laureate and branded a terrorist — for one final time.

"President Arafat would have wanted it this way, with exhilaration, feelings of loyalty, pain, sadness and love all at once," Palestinian legislator Hanan Ashrawi said. "The people reclaimed him. They wanted to say goodbye without distance."

Just hours after Arafat was laid to rest in a stone-and-marble tomb, President Bush said his death provided "a great chance to establish a Palestinian state," and pledged in his second term "to spend the capital of the United States on such a state."

Secretary of State Colin Powell (search) expects to meet soon with new Palestinian leaders but the exact time and place hasn't been determined, a senior State Department official said on condition of anonymity.

The frenzied burial took place at Arafat's headquarters in the West Bank city of Ramallah (search), where Israel had kept him under siege for nearly three years. It came just hours after an orderly funeral ceremony in Cairo, where the only outburst of emotion was the quiet weeping of Arafat's 9-year-old daughter, Zahwa, standing beside her veiled mother, Suha.

Where that service gave foreign dignitaries an opportunity to bid a formal farewell to the 75-year-old Palestinian leader, his burial in Ramallah allowed the Palestinian masses, who adored Arafat even as the United States and Israel tried to marginalize him, to say goodbye.

"Everyone wanted to carry the coffin, to touch it, to say goodbye to the president," said Ahmed Tirawi, 22, a West Bank villager.

Arafat's death Thursday at a French military hospital shocked many Palestinians, who had never considered life without the man who led them for nearly four decades and transformed their struggle from a refugee problem into an international crisis.

Arafat promised Palestinians a state of their own, but died without delivering. Palestinian Cabinet minister Saeb Erekat, who accompanied Arafat's coffin on the helicopter flight from Egypt to the West Bank, said he kept talking along the way, as if Arafat were still alive. "I told him, `My heart is broken. Your life has ended, but the occupation has not."'

The outbreak of Israel-Palestinian violence four years ago left peace hopes in tatters. Israel accused Arafat of instigating terror attacks and cut off all contacts with him, confining him to his compound with threats to expel him if he left.

Many Palestinians accused Arafat of running a corruption-filled regime, but death burnished his image, transforming him into a transcendent symbol of Palestinian defiance.

In accordance with his wishes, Palestinians wanted to bury Arafat in Jerusalem at the Al Aqsa Mosque compound, Islam's third holiest site, which lies atop the ruins of the biblical Jewish temples. Israel refused, fearing chaos and a strengthened Palestinian claim to the city.

Nearby Ramallah was the compromise site. Palestinian officials buried him in a concrete box so they could move him to Jerusalem as soon as possible. Soil from Al Aqsa was sprinkled into the grave.

Israel put its forces on high alert but kept them away from the funeral and tried to defuse tension by limiting travel through the West Bank by Palestinians heading to the burial. Only a small group of officials from the Gaza Strip were allowed to cross Israel and reach Ramallah.

Ramallah is the hometown of Arafat's widow, Suha, but she and her daughter were not at the burial, Erekat said. Senior Palestinian officials, speaking on condition of anonymity, said they were still upset at her for publicly accusing them earlier this week of seeking to usurp Arafat's role without waiting to see if he survived.

Despite fasting for the holy month of Ramadan, tens of thousands of Palestinians from across the West Bank converged on Arafat's compound.

The Palestinians prepared a dignified burial ceremony, erecting a raised marble-and-tile platform under a small copse of trees at the edge of the compound's parking lot to mark Arafat's grave. They then awaited the Egyptian military helicopter bringing Arafat.

But outside the compound walls, the gathering mourners, who were supposed to stay out until after the burial, grew impatient, chanting, "We want to see Abu Ammar," Arafat's nom de guerre.

Teenagers found a gap and slipped in; outnumbered police quickly opened the gate.

The crowd, waving Palestinian flags and banging drums, swarmed inside as security forces formed a cordon to make room for the two-helicopter flight. But it collapsed as mourners rushed the aircraft, delaying the unloading for 25 minutes and forcing police to fire in the air.

The flag-draped coffin was finally removed and placed on a jeep. Police jumped on top of it, waved and flashed the victory sign. People chanted, "With our blood and our soul we will redeem you Yasser Arafat!" and the frenzied crowd pulled the red, green, white and black flag off the coffin.

The military ceremony and a lying-in-state were shelved and Arafat was buried after a few prayers.

His bodyguards wept and embraced. One policeman knelt on the marble and kissed the stone. Olive saplings planted around the grave according to Islamic tradition were trampled. By nightfall, Arafat's grave was covered in a mountain of flags, flowers and the checkered headdress that was his trademark.

"Everyone wants to tell his sons and grandsons, when Arafat died he approached the coffin and touched the coffin or saw the body from close up," explained 27-year-old accountant Rafat Abdullah.

But the pandemonium and bursts of gunfire were at odds with the image of control and orderliness that Arafat's successors wanted to portray.

"It is not what we expected," said Erekat. "I expected much better, more organized, but things got out of hand, unfortunately."

His burial stood in stark contrast to the highly scripted funeral ceremony in Cairo, which was set up to accommodate Arab leaders who refuse to step on Israeli-controlled soil.

The ceremony was restricted to some foreign leaders and officials, among them Syrian President Bashar Assad, Sultan Hasanal Bolkiah of Brunei and South African President Thabo Mbeki, who expressed their condolences to Palestinian officials in a tent.

After prayers in the small mosque, eight pallbearers carried Arafat's flag-draped coffin to a gun carriage. As it was loaded onto a plane, his daughter, Zahwa, standing beside mother, wept.