Thousands of people attended the ceremony in the country's capital to celebrate the signing of the 1973 deal, which ended decades of war with the US and brought a temporary halt to fighting between North and South Vietnam.

Speaking to a packed hall of communist party delegates President Truong Tan Sang described the negotiations as "the longest, most difficult diplomatic struggle for Vietnam".

The deal, signed on January 27, 1973 40 years ago this Sunday represents "Vietnam's diplomatic victory in its struggle against the United States", Sang added after watching a dance re-enactment of the communists' wartime victories.

Talks to end the US-Vietnam war opened in Paris on May 10, 1968, with the US delegation hopeful of reaching a quick deal.

Instead, negotiations dragged on for five years, during which the war escalated as both sides adopted a strategy of "fighting while talking", hoping to translate battlefield wins into bargaining power.

The communists, determined to reunify Vietnam, were ready to bide their time while US leaders were weakened by the domestic anti-war movement and cut troop numbers year-by-year, reducing their diplomatic clout.

Nguyen Thi Binh, a former vice state president who was a key negotiator, hailed the agreement as "a strategic victory which led to the 1975 victory, liberated south Vietnam and reunified the country."

The deal saw all sides agree to a ceasefire and the US pledge to withdraw troops within 60 days while its prisoners were granted freedom.

North and South Vietnam also agreed to work peacefully towards national reunification.

Henry Kissinger and Hanoi politburo member Le Duc Tho were awarded the 1973 Nobel Peace Prize, but Tho refused to accept it, saying his country was not yet at peace.

With no political settlement, fighting again flared and Hanoi breached the agreement, sending its regular troops south. In 1975, communist troops stormed the south and captured Saigon on April 30, ending a war that killed more than 58,000 Americans and an estimated three million Vietnamese.

Agence France Presse - January 26, 2013