Falcon 1, a liquid fuel rocket built by Space Exploration Technologies, or SpaceX, took off from a remote island in the Pacific Ocean on Sunday and entered orbit carrying a dummy payload, SpaceX said.

'This is a great day for SpaceX and the culmination of an enormous amount of work by a great team,' said Mr Elon Musk, the chief executive of SpaceX who made a fortune as the founder of PayPal, an online payment system.

'With this key milestone, Falcon 1 becomes the first privately developed liquid fuel rocket to orbit the Earth,' SpaceX added in a statement from its Hawthorne, California, headquarters.

It was fourth time lucky for SpaceX, whose three previous attempts had met with failure including the launch of a rocket carrying the ashes of Star Trek actor James Doohan and US astronaut Gordon Cooper.

The payload, a 165-kilogram aluminum chamber, remains attached to the second stage of the 21-metre two-stage rocket as it orbits the Earth, SpaceX said.

Falcon 1 was launched at 4.15 pm California time on Sunday (2315 GMT) from a US military facility on Omelek Island in the Kwajalein Atoll in the central Pacific, SpaceX said.

SpaceX, founded in 2002, is seeking to usher in an era of low-cost space flight and is developing a variety of launch vehicles to deliver satellites into orbit but also cargo and crew to the International Space Station. -- AFP