Thousands of protesters have thronged the streets of Hong Kong, ratcheting up pressure on the pro-Beijing government that has called the demonstrations illegal, and vowing to press ahead with their biggest protest so far.

As Hong Kong observed National Day on Wednesday, marking the 65th anniversary of the founding of Communist China, protesters continued to occupy the Central business district and movement leaders said they would announce plans to escalate civil disobedience.

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In a speech on Tuesday, President Xi Jinping did not make any direct reference to the ongoing protests, but pledged that China would protect Hong Kong's interests.

"The central government will unswervingly implement the guidelines of 'one country, two systems' and the Basic Law and steadfastly safeguard the long-term prosperity and stability of Hong Kong and Macau," Xi said.

Al Jazeera's Scott Heidler, reporting from Hong Kong, said that it was unlikely that the government would give in to protesters' demands for Chief Executive CY Leung to step down, and for the Chinese government to drop plans to handpick candidates for Hong Kong's leadership election in 2017.

Heidler said that thousands of protesters refused to leave the site of the demonstration, and braved the rain overnight , with organisers expecting "a lot more people to show up" due to the holiday.

He said that protesters had also started to gather in a separate part of the city, which is popular among mainland Chinese tourists and shoppers.

Earlier on Tuesday, Alex Chow, the secretary general of the Hong Kong Federation of Students, the organiser of the university class boycotts that led to the street protests, said it was considering its options, including widening the protests, pushing for a labour strike and occupying a government building.

Despite widespread fears that police may use force to move crowds before the start of celebrations marking the anniversary of the Communist Party's foundation in 1949, there was little sign of the momentum of the protest flagging.

In the early morning hours of Wednesday, hundreds of demonstrators were milling around outside luxury stores and setting up makeshift barricades in anticipation of possible clashes.

As in most parts of Hong Kong, the police presence was small.

Show of solidarity

M Lau, a 56-year-old retiree, said he had taken to the streets of Hong Kong to protest in the 1980s and wanted to do so again in a show of solidarity with a movement that has been led by students as well as more established activists.

"Later this morning I will come back," he told the Reuters news agency.

"I want to see more. Our parents and grandparents came to Hong Kong for freedom and the rule of law. This [protest] is to maintain our 160-year-old legal system for the next generation."

The protests are the worst in Hong Kong since China resumed its rule of the former British colony in 1997.

They also represent one of the biggest political challenges for Beijing since it violently crushed pro-democracy protests in Tiananmen Square in 1989 .

Cracking down too hard could shake confidence in market-driven Hong Kong, which has a separate legal system from the rest of China.

Not reacting firmly enough, however, could embolden dissidents on the mainland.

Online appeal

Underlining nervousness among some activists that provocation on National Day could spark violence, students from Hong Kong University made an online appeal for people not to disturb the flag-raising ceremony, which took place on Wednesday morning.

Hong Kong protesters remain on streets

That ceremony was attended by hundreds of Hong Kong government officials and several thousand supporters of the government.

Hundreds of protesters lined up in the early hours to view the ceremony at Bauhinia Square on the Hong Kong waterfront.

China rules Hong Kong under a " one country, two systems " formula that accords the former British colony a degree of autonomy and freedoms not enjoyed in mainland China, with universal suffrage set as an eventual goal.

However, when Beijing decreed a month ago that it would vet candidates wishing to run for Hong Kong's leadership, protesters reacted angrily.

Communist Party leaders in Beijing now worry that calls for democracy could spread to the mainland, and have been aggressively censoring news and social media comments about the Hong Kong demonstrations.

Source: Al Jazeera and agencies