As Hong Kong braces for huge pro-democracy rallies, leader CY Leung has urged protesters to back electoral reforms set out by Beijing.
Speaking early on the National Day holiday, Mr Leung said Hong Kong should work with Beijing to achieve progress.
The protesters want Beijing to withdraw plans to vet candidates for the next Hong Kong leadership election in 2017.
Activists say they expect the biggest demonstrations yet on the streets to coincide with the holiday.
By midday, protesters were starting to fill up the main protests site in the Central business district, Causeway Bay and Mong Kok. A fourth protest site has also spread to Canton Road in Tsim Sha Tsui, several roads south of Mong Kok.
Mr Leung, Hong Kong's chief executive, has rejected campaigners' calls for him to stand down. Chinese President Xi Jinping has reaffirmed Beijing's control over the territory.
The 65th anniversary of China's communist revolution began in Hong Kong with a flag-raising ceremony made for TV audiences across China. Nothing was allowed to disrupt the choreography.
The only members of the public allowed to attend were dressed in red baseball caps and T-shirts, waving Chinese flags. One told me the democracy protesters "had ulterior motives and were marginal anyway".
Police were in attendance to protect both the flag and embattled Chief Executive CY Leung. He reminded his fellow citizens that Hong Kong's special status in China, known as "one country, two systems", means just that. It was an implied rebuke to protestors demanding Beijing overturn its restrictions on nominations for the 2017 leadership election.
The protesters are determined to be seen and heard. Some were outside the ceremony, turning their backs on the national flag.
And less than a mile away, crowds were voting with their feet, streaming into what they're now calling Democracy Square, an encampment filled with umbrellas and a sea of freedom flags. The national flag of China nowhere to be seen.
Family atmosphere
The BBC's Juliana Liu, in Hong Kong, says many families and parents with young children are in the streets due to the holiday, but the public do not expect to see any violence or trouble on Wednesday.
It is a completely different atmosphere to that of Sunday, when police fired tear gas and pepper spray at the crowds, she adds.
Early on Wednesday, Mr Leung attended a ceremony in Hong Kong marking China's 65th National Day, which celebrates the founding of communist China in 1949.
The flag-raising ceremony went ahead peacefully, as student protesters looked on from behind police barricades, with some calling on him to step down. The authorities have cancelled a fireworks display that was due to take place later in the day, however.
Addressing officials, Mr Leung said that while people had different ideas about what constituted a "desirable reform package", it was better to have the right to vote than not.
"We hope that all sectors of the community will work with the government in a peaceful, lawful, rational and pragmatic manner to... make a big step forward in our constitutional development," he said.
Beijing ruled last month that it would allow Hong Kong people to elect their next leader in 2017. But the choice of candidates will be restricted to those approved by a pro-Beijing committee - meaning the Chinese government can effectively screen candidates.
A rumbling protest campaign ballooned into mass street demonstrations at the weekend.
Police responded initially with tear gas and pepper spray, but riot police later withdrew and since early on Monday the situation has remained calm.
Crowds swelled again on Tuesday night and the demonstrators - who include student groups, supporters of the Occupy Central movement and others angered by the police response - say they are confident of greater numbers on Wednesday.
So far there are no signs of concessions from Beijing. On Tuesday Mr Xi told Communist Party leaders that his government would "steadfastly safeguard the long-term prosperity and stability of Hong Kong and Macau".
The protests are seen as a direct challenge to Beijing's grip on the territory's politics. Analysts say leaders are worried that calls for democracy could spread to mainland cities.
News of the protests is being heavily censored in mainland China. Media have blamed "radical opposition forces" for stirring up trouble.
Meanwhile the US restated its position on the protests, saying that a genuine choice of candidates in the election would enhance the legitimacy of the chief executive.
On Tuesday, state department spokeswoman Jen Psaki said that Secretary of State John Kerry would discuss the protests with Chinese Foreign Minister Wang Yi when the pair meet on Wednesday.
(BBC)