In honor of the July 4th Independence Day, the U.S. flag flies from the top of the Space Needle in Seattle, 03 Jul 2009

Americans are celebrating the July 4 Independence Day holiday with fireworks, parades and concerts.

Washington and New York are among the cities that will have spectacular fireworks displays Saturday night. Many small towns have been forced to scrap or scale back their celebrations because of the economic crisis.

In his weekly Saturday address, U.S. President Barack Obama encouraged Americans to "kick back" and "enjoy a little time off." But he also reminded people the country is facing challenges "on a scale unseen in our time," from the severe economic recession to the wars in Iraq and Afghanistan.

Mr. Obama said meeting the challenges will require "extraordinary effort on the part of every American," and he urged support for his plans to reform U.S. education, health care and energy policies.

The Fourth of July holiday marks the day in 1776 when the 13 original American colonies officially declared independence from Britain.

President Obama will celebrate Saturday with a Fourth of July event at the White House accompanied by military families. The Public Broadcasting Service and the National Park Service will hold a free gala concert Saturday in front of the U.S. Capitol building. The performers, who include singers Barry Manilow and Aretha Franklin, treated spectators Friday to a full concert dress rehearsal.

New York's Coney Island held its famed Fourth of July hot dog eating contest. Reigning champion Joey Chestnut swallowed his way to his third consecutive victory in the event. Chestnut ate a record-breaking 68 hot dogs in 10 minutes. Six-time winner Takeru Kobayashi of Japan took second place with 64.

Despite troubling financial times in the U.S., many Americans, will find ways to relax and enjoy the holiday with outdoor summertime activities such as barbecues, beach parties, and spending time with family and friends.