"We Were First," trumpeted a headline in the popular Izvestia daily.

"At 22:28 Moscow time on October 4, 1957, humanity entered a new space age. The Soviet Union sent the Earth's first artificial satellite into orbit."

Veterans of the Soviet space programme laid flowers near the Kremlin wall at the grave of Sergei Korolyov, the pioneer who created Sputnik yet whose name remained a state secret all his life.

A monument to the satellite, whose name means fellow traveller, was unveiled near Moscow.

President Vladimir Putin sent a congratulatory message to Russia's space scientists, saying: "The launch of the Earth's first satellite was a truly historic event, which started a space age."

First Deputy Prime Minister Sergei Ivanov, widely considered a contender to succeed Putin, led a tour by schoolchildren of the Korolyov research centre near Moscow.

"Fifty years in cosmic terms is a mere instant and yet it fundamentally changed the nature of all humanity," Ivanov was quoted by RIA-Novosti news agency as saying.

Sputnik 1 was a huge propaganda coup for the Soviet Union in its rivalry with the United States and is being interpreted in the same vein 50 years later amid heightened Russian assertiveness.

"On that day, October 4 1957, America was seized by panic," Russia's space agency Roskosmos recalled in a statement announcing a special film on the launch.

The event was at first played down in Soviet official media but quickly prompted awed headlines in Western newspapers and caught the United States badly off balance.

The hurried launch of a US satellite in December 1957 was a disastrous failure -- a "flopnik," as the London Daily Herald observed in a headline -- for it barely got off the ground before bursting into flames.

By then Russia had already launched Sputnik 2, which carried Laika the dog into orbit. Laika became the first space casualty, but also a household name.

Sputnik 1, a silvery orb with four spiky antennae whose primitive signals were picked up by radios around the world, also helped inspire a generation of astronauts and scientists.

The satellite was the first of several early achievements for the Soviet Union's space programme, including sending the first human, Yury Gagarin, into orbit in 1961 -- another stinging loss of face for the United States.

The United States later took the upper hand with the first manned mission to the Moon in 1969.

Their race over, the Soviets and Americans began to cooperate in space and the fall of the Soviet Union in 1991 pushed space spending "almost entirely into the civilian sector," Italian astronaut Robert Vittorio told AFP in Turin.

Today, though, the militarisation of space is back on the agenda, reflected by dual-use (civilian and military) hardware in orbit and China's testing of an anti-satellite weapon on January 11, Vittorio observed.

On Wednesday, the Russian and US space agencies signed agreements in Moscow under which Russia will provide technology for US missions to scan the surface of the Moon and Mars, particularly searching for water traces that could make the Moon suitable for human habitation.

"These two projects demonstrate the commitment by our countries to continue to look for opportunities where it is mutually beneficial to cooperate," NASA Administrator Michael Griffin said at the signing ceremony.

Russia's space programme suffered severe funding cuts after the collapse of the Soviet Union but has been partly revived thanks to greater state financing and international partnerships.

Putin has exhorted Russia's space scientists to up their game, but also acknowledged the "negative impact" of economic hardship in the 1990s.

Russia plans to send a probe to a moon of Mars and a manned Moon mission by 2025.

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