NEW ORLEANS (AFP) - New Orleans observed the 10th anniversary of Hurricane Katrina on Saturday, remembering the dead and joyously celebrating the "Big Easy's" comeback from disaster with marches and brass bands.

The city's leaders placed wreaths at a memorial to Katrina's unknown victims, marking the hour that the Category 5 storm struck with catastrophic force, overwhelming this Louisiana port's system of levees.

More than 1,800 people were killed across the US Gulf Coast when Katrina made landfall on Aug 29, 2005. A million people were displaced and the financial toll topped US$150 billion (S$211 billion).

"New Orleans will be unbowed and unbroken. We're still standing after 10 years," said Mayor Mitch Landrieu said at a solemn ceremony attended by about 400 people on the lawn of Charity Hospital on Canal Street in the hard-hit Lower Ninth Ward.

"We have risen, and we will rise again, but we can only do it if we hold each other up and we don't leave anybody behind."

The memorial to the unclaimed Katrina victims holds the remains of the scores of victims whose bodies were never identified or claimed.

"We know that even as New Orleans is rebuilding, there are those who are grieving the deaths of their mothers, their fathers, their sisters. I want to those families to know that our thoughts are with them," Governor Bobby Jindal said.

"Although Hurricane Katrina brought us to our knees, we did not allow that storm to keep us down. That's because of our resilient spirit," he said.

After the wreath ceremony, the solemnities gave way to parades, marches and partying to cap a week filled with remembrances, conferences, tributes and a visit from US President Barack Obama.

Later in the morning, a "Resilience Fest" will feature a New Orleans-style "second line" marching brass band.

Other neighbourhoods and cultural centres are scheduled to hold their own parties and parades before former president Bill Clinton speaks at an evening commemoration, with performances by a number of Grammy-winning musicians.

The events commemorate the destruction of New Orleans - and the botched government response to the mounting crisis - which shocked the world.

Some 80 per cent of the low-lying coastal city was swallowed by floods which rose as high as 6m after the coastal city's poorly-built levee system burst from the pressure of a massive storm surge.

The water came up so fast some people drowned in their homes. Hundreds more were stranded on their rooftops.

The few dry spots in the city descended into chaos as tens of thousands of increasingly desperate people with little food or clean water waited for help to finally reach them.

'SEA OF MISERY AND RUIN'

"All of us who are old enough to remember will never forget the images of our fellow Americans amid a sea of misery and ruin," former president George W. Bush said in a visit to a New Orleans school on Friday.

Bush, who faced intense criticism for his handling of the crisis, said he was moved by the city's determination to "rebuild better than before" and "a spirit much stronger than any storm."

Colourful homes on stilts have replaced many of the rotten hulks left behind by the stagnant flood waters. Music and the smell of gumbo once again waft through the bustling streets of the French Quarter.

The tourism industry is booming, with nine million visitors last year and the city has managed to attract a growing number of tech firms and new businesses.

Crime - while still high - is improving, with the murder rate hitting a 43-year low in 2014 and the population in city jails down by two-thirds. The troubled school system was reformed, pushing graduation rates and test scores up.

'EXTRAORDINARY RESILIENCE'

Obama praised the "extraordinary resilience" of those who returned to New Orleans to repair shattered homes and businesses and "build a better future."

Katrina "started out as a natural disaster became a manmade disaster - a failure of government to look out for its own citizens," Obama said as he toured the city on Thursday.

Some residents say the flavour of a city that was once much more Creole and Afro-Caribbean has been altered by the storm.

A large portion of the population never came back. New Orleans now has 100,000 fewer residents than it did before Katrina and many are newcomers.

The black population has fallen by about 115,000 people, dropping from 68 per cent of residents in 2000 to 60 per cent in 2013, latest census figures show.

Plenty of white residents also found the emotional and financial cost of rebuilding to be too high, though their numbers are harder to measure.