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MELBOURNE - Australia is a nation deep in mourning, Victorian Premier John Brumby has told a memorial service to remember those in died in Victoria's devastating bushfires.

Tens of thousands gathered today in Melbourne, including hundreds of bushfire survivors who were shuttled into the city from fire-ravaged towns.

"We are picking up the pieces after the worst natural disaster in Australia's history. Devastating fires that have taken family, friends, neighbours and workmates," Mr Brumby said at the service at Rod Laver Arena.

"Destructive fires that have torn at the very heart of communities," he said.

The arena was filled with people, including political leaders, religious leaders, Princess Anne and other dignitaries.

Many of those at the service were wearing the distinctive yellow overalls of the firefighters.

At least 209 people are known to have died in the February 7 fire storms, most of those from a sweep of towns and villages northeast of Melbourne.

Services are being held across Australia to remember the bushfire victims.

In a sombre procession, members of the official party including Prime Minister Kevin Rudd, Mr Brumby, Governor-General Quentin Bryce and Princess Anne laid flowers at a wreath to remember the dead.

Singer Deborah Cheetham led singing of the national anthem.

Aboriginal leader Auntie Joy Murphy officially welcomed those to the land of the Wurundjeri people.

"The terrible loss of so many human lives, animals and homes is extremely difficult to comprehend and accept, to believe what has happened," Ms Murphy said.

"The spirit of the land will reclaim itself and the bush animals and the pets will return, this is nature's way," she said.

Princess Anne, representing Queen Elizabeth and the royal family, read out a message written by the Queen soon after the fires occurred and passed on her condolences.

"Although a little daunted, when faced with the scale of loss, and the physical and mental impact that these bushfires have made and are still making for Victoria, individuals and towns have responded with resilience, ingenuity, courage and selflessness to situations that were changing at terrifying speed," Princes Anne said.

She said she would be visiting fire affected areas later today and speaking to some of those touched by the tragedy.

"People from around Australia and across the world watched in horror, but with admiration at their response," Princess Anne said.

"I would particularly thank all those involved in whatever capacity, in the emergency services and in the voluntary organisations," she said.

Prime Minister Kevin Rudd said Black Saturday saw the worst of nature but the best of humanity, and vowed that every year on February 7 Australian flags would fly at half mast.

"In recent days we have witnessed unspeakable suffering. We have lost mothers and fathers, grandmothers and grandfathers. We have lost brothers and sisters, sons and daughters, the tiniest of children, family and friends and neighbours," Mr Rudd said.

"All these are precious lives. No words can provide solace for grief so personal. But simply know this. You who suffer are not alone.

"This great Australian family here assembled and across the nation today is with you."

He said Australia's reaction to the bushfires was different to what may have been expected in other places.

"In some countries tragedy exposes the faultlines in a nation. The strong abandoning the weak. One region indifferent to the sufferings of another. One culture uncaring as to the needs of another.

"But ours is a different nation. Our nation has been as one. Australia, a nation of compassion," Mr Rudd said.