South Sudan Becomes World's Newest Nation

                                                                       JUBA, South Sudan (CNN) -- World leaders gathered in South Sudan to celebrate the world's newest nation Saturday, hours after jubilant crowds draped in flags danced down the streets in a boisterous midnight party.

Tens of thousands cheered, whistled and waved miniature flags as the new nation hoisted its new flag.

Others wept.

United Nations Secretary General Ban Ki-moon, Sudanese President Omar al-Bashir and South African President Jacob Zuma joined other leaders at the independence day events.

Al-Bashir said this week he is making the trip to convey "brotherly relations" between his government based in the north and South Sudan.

Hours before rows of planes carrying leaders lined up at the airport, honking cars rolled through the streets.

Passengers danced on top of cars and banged on cans to mark independence day.

"This is liberation, a new chapter," said Abuk Makuac, who escaped to the United States in 1984 and came back home to attend the independence day activities.

"No more war. We were born in the war, grew up in the war and married in war."

South Sudan's sovereignty officially breaks Africa's largest nation into two, the result of a January referendum overwhelmingly approved by South Sudan voters.

The referendum was part of a 2005 peace deal that ended decades of civil war pitting a government dominated by Arab Muslims in the north against black Christians and animists in the south. The war killed about 2 million people.

Amid the independence celebrations, some residents paid tribute to relatives killed in the war.

"It is very emotional. I'm excited, but I'm also thinking of all the people who died for this to happen," said Victoria Bol, who lost dozens of family members.

President Barack Obama said the United States recognizes South Sudan as a sovereign and independent state.

"Today is a reminder that after the darkness of war, the light of a new dawn is possible," Obama said in a statement. "A proud flag flies over Juba and the map of the world has been redrawn."

Challenges await the new nation once the independence excitement wears off.

South Sudan is among the world's poorest, with scores who fled the long conflict coming home to a region that has not changed much over the years.

The infrastructure is still lacking -- with few paved roads in the new nation the size of Texas. Most villages have no electricity or running water.

South Sudan sits near the bottom of most human development indices, according to the United Nations, including the highest maternal mortality and female illiteracy rates.

Although the north has flourished, the South has not changed much over the years, said South Sudan native Moses Chol.

"They have schools and clean water, and their children are not dying of simple diseases," Chol said, referring to the north. "In the south, people still drink stagnant water. They have nothing."

There is also the threat of renewed fighting between the two neighbors.

Clashes have erupted recently in the disputed region of Abyei and South Kordofan, a border area between the northern and southern regions.

And despite the 2005 peace deal brokered by the George W. Bush administration, forces aligned with both sides continue to clash.

Abyei was a battleground in the brutal civil war between forces of both sides. A referendum on whether the area should be part of the north or the South has been delayed amid disagreements on who is eligible to vote.

The two countries look set to divorce in name only -- they have not reached an agreement on the borders, the oil or the status of their respective citizens.

The U.N. Security Council, which voted to send up to 7,000 peacekeepers and 900 uniformed police to South Sudan, is expected to meet Wednesday to discuss U.N. membership for the new nation.

As dignitaries gathered in the new capital to celebrate the new nation, world leaders warned of a tough road ahead.

"Their economic prospects are dim unless the two sides can come to agreement on how to share precious resources, cooperate in other economic areas and together promote the viability and stability of each other," the U.S. special envoy to Sudan, Princeton N. Lyman, said in an editorial to CNN.

Lyman, who attended the ceremony, said both sides want food, education and security for their families.

"They want the freedom to be able to express their opinions, choose their leaders and become active participants in political and social life," he said.

South Sudan natives such as Makuac admit there are challenges ahead. However, she is pushing those thoughts to the back-burner for now.

"We have waited so long to get here ... I will worry about that later," she said. "This weekend, we celebrate."

CNN's Nima Elbagir reported from Juba, South Sudan, and Faith Karimi reported from Atlanta.