HO CHI MINH CITY (AFP) - Vietnam's premier on Thursday hit out at the "barbarous crimes" of its wartime American foe as the nation marked four decades since the fall of Saigon, an event that delivered a communist victory and a painful blow to US moral and military prestige.

The central streets of southern Ho Chi Minh City - formerly Saigon - were filled with a forest of hammer and sickle flags of the Communist Party, as regiments of goose-stepping soldiers filed past the country's top leaders.

In front of Independence Palace - whose gates northern tanks clattered through in one of the iconic moments of the 1975 victory - Prime Minister Nguyen Tan Dung struck out at the US attempt to contain the spread of communism in Southeast Asia through war in Vietnam.

"They committed countless barbarous crimes, causing immeasurable losses and pain to our people and country," he said in an address.

The war killed millions of Vietnamese - both civilians and combatants from the divided North and South - and left hundreds of thousands more wounded.

The physical affects of conflict still linger, including through deformities that Vietnam says are caused by the dioxin Agent Orange, sprayed by the US air force to pare back the thick jungle used as cover by the northern guerrilla forces.

Some 58,000 US servicemen also died in a war that remains seared into the consciousness of the American public, most often as a tragic waste of young lives and a symbol of the over-extension of power.

It was the first Cold War conflict to be extensively covered by the Western press - and the first to be lost by a modern superpower that thought itself unbeatable.

The communist victory was one of "ardent patriotism," Dung said, hailing the reunification of Vietnam, which was cleaved apart in 1954 into the communist North and the US-backed South.

Veterans at the parade spoke of their pride at having fought the Americans.

"On the battlefield we were devoted to our country. An event like this is necessary to help young people understand the glorious history of our country," 72-year-old Nguyen Van Hung told AFP, wearing his old army uniform.

But divisions remain - up to a million "boat people" fled the south in the aftermath of the conflict and now form a vocal diaspora, staunchly opposed to Vietnam's authoritarian one-party state.

Domestically, the Communist Party is also facing rising public discontent over high-level corruption, growing inequality and its continued efforts to smother criticism.

American officials did not attend the Vietnamese parade, but instead held a low-key ceremony at the US consulate in Ho Chi Minh City.

"Americans remember the past and we honour it, while we look to the future and build on it," said ambassador Ted Osius, adding that the relationship between the two countries was constantly improving.

Washington has drawn closer to Hanoi in recent years, in the face of growing Chinese assertiveness in the region.

Vietnam has also long since abandoned the Soviet model and embraced the market capitalism of its one-time enemy, ushering in a period of prosperity and growth.

The once bitter north-south divisions have also eased, and for many young job seekers the south, and Ho Chi Minh City in particular, is now a magnet - seen as more socially liberal and free market-oriented than the conservative capital Hanoi.

Yet discontent with the government rumbles on, observers say, prompting the authoritarian state to lean heavily on its past military victories to legitimise its rule.

People used to see the war "as one for national liberation and unification," Tuong Vu, an associate professor of political science at the University of Oregon told AFP.

"These days most Vietnamese perhaps believe that the war was a tragic event during which Vietnamese killed other Vietnamese... the Communist Party is no longer seen as patriotic or invincible," he said.

But the local media, which is entirely state-run, has run fawning stories ahead of the anniversary, heavy on wartime heroism.

That official narrative still chimes with many among the older generation but increasingly, the public is indifferent or even hostile to such shows of official patriotism.

"Let the past go, it's been 40 years," wrote businessman Tran Minh Chien on his Facebook page in a typical social media reaction to the anniversary.