Israelis celebrated the country's 59th Independence Day in balmy weather on Tuesday with a mix of malaise and festivity. Millions enjoyed barbecues in backyards and parks while lamenting the latest reports of corruption and the depressing after-effects of last summer's inconclusive war in Lebanon. Speaking at an Independence Day celebration at Beit Hanassi, Vice Premier Shimon Peres said: "The country is in a good state but in a bad mood." Remembrance Day for the Fallen, a somber 24 hours of visits to cemeteries, tales of survivors and sad recollections of wartime losses, gave way Monday evening to the celebration of Independence Day. At the state ceremony on Mount Herzl on Monday night, Acting President and Knesset Speaker Dalia Itzik appealed to Israelis to remain upbeat despite the outcome of the Second Lebanon War. "We must not fall into endless self-flagellation that stays our hand and paralyzes all action," Itzik said. At Mount Herzl, pioneers and soldiers kindled 12 huge torches to signify the start of the holiday. Soldiers marched in formation, and fireworks lit up the Jerusalem sky on a mild spring evening. Cities and towns set up outdoor stages for entertainment. Families loaded their cars with portable grills, charcoal, food and toys for the kids and headed to national parks and picnic spots. Both Itzik and Chief of General Staff Lt.-Gen. Gabi Ashkenazi emphasized Israel's obligations to its prisoners of war and soldiers missing in action in their Independence Day addresses at Beit Hanassi. While Ashkenazi did not mention any of the IDF's kidnapped or missing soldiers by name, Itzik asked all those present to remember that Gilad Schalit, Ehud Goldwasser and Eldad Regev were not present. "The State of Israel is indebted to you, Gilad, Ehud and Eldad. [Israel] is doing and will continue to do everything in its power to bring you home," Itzik said. Echoing the same sentiment, Ashkenazi said that "We remember the POWs and the MIAs daily." Itzik said there was no day more appropriate than Independence Day to address the values that guided Israel's defenders. "Excellence is not something that can be taken for granted," she said. The past year, Itzik said, had been one of the most trying periods for the IDF. The IDF has had to contend with a new reality, while maintaining the standards of humanity, morality, purity of arms and discipline that are the foundations of Israel's existence, Itzik continued. Ashkenazi said that Israel's independence and continued existence had been achieved at a heavy price. "The family of the bereaved keeps growing," he said. Earlier, Itzik and Ashkenazi had together reviewed an honor guard of 120 outstanding IDF soldiers, whom Ashkenazi described as "the best of the best." Of the 120, six were new immigrants, five had fought in the Second Lebanon War, seven came from Israel's minority communities and 25 percent were women. The first outstanding soldier called up to receive a citation and a $1,000 gift from the Soldiers Welfare Association was volunteer IAF Cpl. Mor Shalit from Gan Shomron, who suffers from congenital muscular disease that confines her to a wheelchair, but who was adamant in her desire to serve her country. Asked by The Jerusalem Post to sum up her feelings on being named an outstanding soldier, Shalit said, "Now I've achieved everything I wanted to achieve." Prime Minister Ehud Olmert heaped praise on Itzik for the manner in which she has performed her duties. Speaking after Itzik at an Independence Day reception at Beit Hanassi for IDF commanders from the War of Independence to the present day plus other leaders of the defense establishment and the intelligence branch, Olmert opened his remarks by lauding Itzik. The role of president is very difficult, and that of speaker of the Knesset is even more complex, he said. To carry out both roles in such volatile and intense times, and to do it with style, with grace, gravity and honor was an admirable accomplishment for which Itzik deserves recognition, he declared. Some saw in his comment a possible endorsement of Itzik as president, should she decide to run. Noting that the main thrust of Israel's 59th Independence Day celebrations was the 40th anniversary of the Six Day War and the reunification of Jerusalem, Itzik said that in the memory of the nation, the Six Day War was one of the greatest achievements of the Israel Defense Force. In an incredibly short time, she said, fighting against an enormous concentration of troops, the IDF scored a victory "that changed the entire reality of the Middle East." While remembering the triumphs of that war, said Itzik, it was imperative not to forget the cost in human life which helped to bring about those successes. In paying tribute to the many soldiers who laid down their lives for the security of the State of Israel, Itzik was also mindful of those veterans "who until their last day will carry with them the scars of war." Today, she continued, the IDF is at full strength and in a state of preparedness while simultaneously learning from the errors made in the Second Lebanese War. From what she had heard from many sources, she said, the IDF is ready at every level to confront every possible challenge. The reception was also attended by a few members of Mahal, the acronym for Mitnadvei Hutz La'aretz - the foreign volunteers who came to fight with and for Israel in 1948. Among the most prominent of these is former South African Col. (Res.) David Teperson, better known as "Migdal" (tower) because he's at least a head taller than most people. The director of the Mahal Museum and a member of the Board of Directors of the Latrun Museum, Teperson, who was on the first plane of volunteers who came from South Africa in 1948, on Tuesday celebrated not only Independence Day but the 59th anniversary of his induction into the IDF. He has fought in all of Israel's wars and in two of them with his sons. An octogenarian well past the age of service, the energetic and straight-backed Teperson continues to do reserve duty and is also on the World War II Museum Committee. More than 1.5 million Jews fought in World War II, he said, and a museum documenting their exploits and the armies in which they served is to be built in Israel with the financial support of the government. Of the Mahalniks, he added, 80 percent were World War II veterans. Israel's abiding desire for peace, her acceptance of a two-state solution to the Israeli-Palestinian conflict and the sense of optimism that Israel can overcome the obstacles to peace were conveyed by Itzik and Foreign Minister Tzipi Livni in separate addresses to the diplomatic corps, heads of churches and religious communities, military attaches, representatives of peace-keeping forces stationed in the region, and Knesset members at the traditional Beit Hanassi Independence Day reception for the international community. Itzik noted that despite 10 wars in six decades, and the constant battle against terrorism, Israel has succeed in creating a robust country with a stable and modern economy, sophisticated health, welfare and education systems, innovative scientific research centers and a vibrant Hebrew culture. But peace has thus far remained elusive. Indeed, she said, Israel is filled with hope and believes that with sincere, direct and courageous dialogue, peace is attainable "in our time." Itzik also expressed appreciation for the contributions of the countries represented by the ambassadors to the promotion of peace, security and stability between Israel and her neighbors. Livni referred to Israel's constant challenge "in closing the gap between perception and reality". As diplomats, she told her audience, "You have been exposed to a different Israel - the real Israel - rather than the Israel that is often portrayed on television screens around the world." Another reality in Livni's book is one that contradicts the Bible. "Despite what the Bible says, we are no longer nor should we be a nation that dwells alone," she said as she listed some of Israel's efforts towards making the world a better place. Israeli technology is helping sufferers of MS and Alzheimers, is developing ways to turn radioactive waste into clean, usable energy and is inventing new ways for people around the world to communicate with each other, she said. On Monday, former Mahalniks, including representatives from the UK, France and the US, met, as they do annually, at the World Mahal Memorial in the forest at Sha'ar Hagai near Latrun, to honor the memory of their 120 fallen comrades. Maurice Ostroff contributed to this report.