GAZA/JERUSALEM (Reuters) - Palestinians commemorated the 1948 "Nakba" or catastrophe, on Wednesday, marking the time when hundreds of thousands were dispossessed of their homes in the war at the birth of the state of Israel, as fighting raged amid the rubble in Gaza.

The Nakba has been one of the defining experiences for Palestinians for more than 75 years, helping to shape their national identity and casting its shadow on their conflicted relationship with Israel in the decades since.

This year's commemoration has been dominated by the plight of around two million Palestinians in Gaza, most of whom are living in temporary shelters after being displaced from their homes by the Israeli campaign launched in the wake of the Hamas-led attack on Israel last October.

"There is no catastrophe worse than this one," said 80-year-old Umm Mohammed, who survived the original Nakba as a child in the southern town of Beersheba before coming to Gaza, where she has spent most of her life and where she now lives in a tent in the southern city of Rafah.

"I've been here for about 80 years and a catastrophe like this, I have not seen. Our homes have gone, our children have gone, our property has gone, our gold has gone, our incomes have gone - nothing is left. What is left for us to cry over?"

The seven-month-old Israeli campaign, which has left much of the Gaza Strip a wasteland of rubble and wrecked buildings, has killed more than 35,000 Palestinians and displaced most of the population, drawing fears among many of a second Nakba in which they would be forced from Gaza altogether.

For many of the descendants of the 1948 refugees, keeping the memory alive of what their parents and grandparents lost remains an important priority. But for some, the experience of the past months has superseded the old stories of families being driven from their villages.

"My mother and father told me about the Nakba, the first one, but this Nakba here is worse," said 58-year-old Faridah Abu Artema, sitting in a tent encampment near Rafah. "This is destruction. They've destroyed us - what we have seen, no one else has seen. This is a tragedy."

The May 15 Nakba day commemoration marks the start of the 1948 war, when neighbouring Arab states attacked Israel a day after the new state declared its independence following the withdrawal of British forces from what was then called Palestine.

REFUGEE CAMPS

The fighting lasted for months and cost thousands of lives, with almost 800,000 Palestinians fleeing their homes or driven away from villages in what is now Israel, most into makeshift camps like the ones now occupied by the displaced of Gaza.

Over the years, dozens of refugee camps have grown into densely built up urban townships spread throughout the Middle East, where the 1948 refugees and their descendants make up almost half the total Palestinian population.

More than 5.9 million Palestinians are currently registered as refugees in the West Bank, the Gaza Strip, Jordan, Lebanon and Syria, according to United Nations figures, in addition to a diaspora population across the world.

Events marking the Nakba anniversary were also held in Ramallah, the main city in the occupied West Bank, where thousands bearing Palestinian flags marched, carrying signs with the names of villages of their grandparents.

A 20-year-old student at Bir Zeit University, resident in the Jalazoun refugee camp north of Ramallah, was killed in a clash with Israeli forces.

Demonstrations were also planned in Jordan and Lebanon where some two million Palestinians are registered as refugees by the U.N. Palestinian aid agency UNRWA.

(Additional reporting by Ali Sawafta in Ramallah; Writing by James Mackenzie, Editing by William Maclean)

By Mohammad Salem and James Mackenzie