Palestinians call it the Nakba, or catastrophe - the anniversary of the day Israel became a state and hundreds of thousands of Arabs fled or were forced out.
In Israel and the occupied territories, thousands of people joined protests which turned into clashes with police.
Scores were wounded and two people were killed in Gaza.
But the worst violence was on the borders with Lebanon and Syria, where Palestinian refugees marched to the border and tried to breach the fence into Israel.
Thousands entered the Golan Heights, which Israel annexed from Syria in 1967, but most were arrested or turned back.
The Lebanese army on the Lebanese frontier said 10 Palestinians died when Israeli forces shot at rock-throwing protesters to prevent them from entering the Jewish state.
Lebanese security sources said more than 100 people had been wounded in the shooting in the Lebanese border village of Maroun al-Ras.
The Israel army said the Lebanese army had also used live ammunition in an attempt to hold back the crowds rushing the border fence.
Israeli military spokeswoman Lieutenant Colonel Avital Leibovich has accused Syria of orchestrating the incursion in the Golan Heights.
"The Syrian regime is intentionally attempting to divert the world's attention away from their brutal crackdown on their own civilians to the incitement on Israel's northern border.
Israeli prime minister Benjamin Netanyahu said he hoped the confrontations would not escalate.
"I've instructed the army to behave with maximum restraint," he said.
"We hope the calm and quiet will quickly return. But let nobody be misled, we are determined to defend our borders and sovereignty."
One man, Ahmad Abu Arab, says protesters have taken courage from the recent uprisings across the Middle East.
"For 63 years we've been under occupation," he said. "Everywhere else in the world people are finding their freedom, but not the Palestinians."
Palestinian president Mahmoud Abbas said in a televised address to mark the anniversary that those killed were martyrs to the Palestinian cause.
"Their precious blood will not be wasted. It was spilt for the sake of our nation's freedom," he said.
Syrian media reports said Israeli gunfire killed two people after dozens of Palestinian refugees infiltrated the Golan Heights from Syria along a frontline that has been largely tranquil for decades.
The Syrian foreign ministry condemned what it called Israel's "criminal activities".
Tense border
On Israel's tense southern border with the Gaza Strip, Israeli gunfire wounded 82 demonstrators approaching the fence with the Hamas Islamist-run enclave, medical workers said.
In a separate incident, Israeli forces said they shot a man who was trying to plant a bomb near the border. A body was later found.
In Tel Aviv, Israel's commercial hub, a truck driven by an Arab Israeli slammed into vehicles and pedestrians, killing one man and injuring 17 people.
Police were trying to determine whether the incident was an accident or an attack. Witnesses said the driver, who was arrested, deliberately ran amok with his truck in traffic.
Jordanian police fired teargas to disperse hundreds of pro-Palestinian activists who gathered at a village on the border with Israel.
"The police pushed us out of the protest area and after using teargas started to chase us with batons," one said from Karama village.
A spokesman for Islamist Hamas movement in the Gaza Strip, Sami Abu Zuhri, called it "a turning point in the Israeli-Arab conflict" that proved the Palestinian people and Arabs were committed to ending Israeli occupation.
Hezbollah condemned the "Israeli aggression on unarmed civilians in Maroun al-Ras and in the Golan, which constitutes a dangerous violation of human rights", said Hezbollah lawmaker Hassan Fadlallah at a pro-Palestinian protest in Maroun al-Ras.
"The resistance movement in Lebanon will continue to be an advocate of Palestinian national rights and calls on everyone to stand united in confronting Israeli occupation.
"What happened today in Maroun al-Ras and in the Golan is an embodiment of the will of the Palestinian people, who are committed to the right of return."
@'ABC'
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