LOUISVILLE (AFP) - Muhammad Ali's hometown Louisville said farewell to the boxing legend and civil rights hero, with thousands lining the streets for an emotional procession and thousands more packing a sports arena for a star-studded memorial service.

The public ceremony on Friday US time, which began with a Koranic chant, capped two days of tributes honouring the three-time heavyweight world champion known as "The Greatest," who died last week at 74 after a long battle with Parkinson's disease.

"If Muhammad did not like the rules, he would rewrite them," his wife Lonnie told the thousands of mourners, who chanted his name as she took the stage. "His religion, his name, his beliefs, were his to fashion, no matter what the cost."

Former president Bill Clinton and comedian Billy Crystal also eulogised the legendary fighter, after a funeral procession through Louisville, the largest city in the southern state of Kentucky where Ali was born at a time of racial segregation.

"We all have an Ali story. It's the gift we all have that should be most honored today because he released them to the world," Clinton said. "Besides being a lot of fun to be around and basically a universal soldier for our common humanity, I will always think of Muhammad as a truly free man of faith."

Crystal, who brought some levity to the proceedings with comic impressions and a few well-received jokes, called Ali "a tremendous bolt of lightning created by Mother Nature, the fantastic combination of power and beauty".

Fans lining Louisville's streets to catch a glimpse of the hearse carrying Ali's remains were in a festive mood - taking photos, cheering, applauding and chanting Ali's name in the bright sunshine. Some even wore boxing gloves.

The route covering about 30km passed by sites important to "The Champ": his childhood home, the Ali Centre, the Centre for African American Heritage - which focuses on the lives of blacks in Kentucky - and along Muhammad Ali Boulevard before arriving at the Cave Hill Cemetery for a hero's burial.

Spectators threw red roses and other flowers onto the hearse, blocking much of its windshield by the time it reached the cemetery. A fleet of limousines transporting Ali's family and close friends followed in the cortege.

Police officers jogged alongside the hearse as it passed Ali's boyhood home, to keep the large crowd out of the street.

"The kids love him, he's always stood for hope in this neighbourhood," Toya Johnson, who wore an Ali T-shirt, told AFP.

"For the youth here, he is an example." Born Cassius Clay in 1942, the boxer won Olympic gold and went on to a glorious professional career, with his epic fights - like the "Rumble in the Jungle" with George Foreman and the "Thrilla in Manila" with Joe Frazier - now the stuff of sports legend.

He shocked America by refusing to serve in Vietnam, a decision that cost him his title and his career for years. He earned scorn for his incendiary comments about his opponents, once calling Frazier a "gorilla." But Ali later earned global respect as a civil rights activist who preached religious tolerance, and for his public battle with a disease that ravaged his once powerful body.

Actor Will Smith - who earned an Oscar nomination for his portrayal of Ali on the silver screen - and former heavyweight champions Mike Tyson and Lennox Lewis served as pallbearers at the burial, which was closed to the public.

Tyson's participation was only confirmed early Friday.

"The grief that he showed was immense, he did not know at the time if he could do that emotionally... but apparently yesterday he decided he had to be here," family spokesman Bob Gunnell said.

The interfaith memorial service led by an imam began in the mid-afternoon at a huge sports arena, bringing together VIPs and fans alike.

Some 15,500 people are expected to attend - with free tickets snapped up in a half-hour and a black market for the coveted tickets sprouting online.

Barack Obama was not present at the funeral of the man he calls a "personal hero" since it coincides with his daughter Malia's graduation from high school.

But the US president published a video message on Thursday in which he displayed two mementos given to him by "The Champ" - a book of photographs and a set of gloves - which he has kept near to him through his time in the White House.

"This week we lost an icon," Obama said in the message. "A person who for African Americans, I think, liberated their minds in recognising that they could be proud of who they were."

"I grew up watching him. I grew up having my identity shaped by what he accomplished," he said.

"The incredible gestures of love and support that he showed me was one of the great blessings of my life."

Turkish President Recep Tayyip Erdogan had been scheduled to attend Friday's memorial service but cut short his trip to the United States after a disagreement with funeral organisers, Turkish media reported.

Erdogan's bodyguards and US Secret Service agents had also clashed briefly at Thursday's Islamic prayer service as they jointly guarded the Turkish President, the newspaper said.

On Thursday, thousands came together for the Muslim service in remembrance of the champion, who converted to Islam in 1964, changing his name to Muhammad Ali.

Muslim men and women prayed in separate rows, most of the latter with their heads veiled.

The brief ceremony brought together dignitaries and ordinary fans, honoring a man known for both his tenacity in the ring and his social activism outside of it.

"My hero was locked in his body," said Louisville taxi driver Fred Dillon, referring to Ali's fight with Parkinson's.

"Now he can float like a butterfly."