The crowd in midtown Manhattan, which police expected to approach 1 million, cheered and counted down the final seconds of 2012 as a large lighted crystal ball descended for the last minute of the old year - a tradition started in 1907.

Thousands cheered as the new year officially began and a blizzard of colourful confetti fell on the famous square. But the cheers - and a spirited crowd rendition of the song "New York, New York" - were quickly drowned out by a fireworks show.

Paul Hannemann, the head of an incident response team at the Texas Forest Service, was in New York to help with the reconstruction efforts in areas hit by Superstorm Sandy.

Even as he spent his first New Year's Eve in Times Square, Hannemann's thoughts were on Washington, D.C., where lawmakers worked late into the night to reach a deal to avoid the so-called fiscal cliff of automatic tax hikes and spending cuts that many economists fear could send the nation back into recession.

"I hope everybody can come together in 2013 so our country can get its finances in order and our economy back in place," Hannemann, 60, said.

In addition to the crowd on hand in Times Square, another billion people were expected to watch on television, city officials said.

People filled pens in the centre of Times Square hours before the end of 2012. Police set up barricades to keep away the overflow crowd. Once people entered the police pens, they were not allowed to leave, no alcohol was permitted and there were no restrooms.

At 6 p.m. the ball rose to the top to the top of its 70-foot (21-meter) pole and fireworks went off.

A few minutes earlier, the cheering crowd turned silent when the ceremony released balloons for each of the victims of the December 14 elementary school shooting in Newtown, Connecticut.

Mark Barrigan, a medical software product manager, traveled from Dallas to witness the ball drop live for the first time this year, fulfilling a longtime wish.

"It was one of those bucket list items," Barrigan said, referring to a list of activities people plan to do before they die.

Asked what he was hoping for in the new year, Barrigan replied, "Hopefully they'll make some good decisions in Washington, D.C."

Elsewhere in America, same-sex marriage became legal at 12:01 a.m. in Maryland.

Maryland, Maine and Washington state became the first three U.S. states to approve gay marriage by popular vote on November 6. Nine states and the District of Columbia now have statutes legalizing gay marriage.

FREEZING TEMPERATURES

The temperature in Times Square was predicted to hover just above freezing around midnight, with a possibility of rain or snow flurries, forecasters said.

The Revellers came for the people-watching for which Times Square is famous, and to see performers such as Taylor Swift, Psy, Carly Rae Jepsen and Neon Trees.

"For me, 2013 is about leaving everything behind and starting from scratch," said Mara Trevin, a 26-year-old who moved from Buenos Aires to New York last week to start a new life.

"That's my resolution."

The illuminated, crystal-covered ball - some 12 feet (3.7 metres) in diameter and weighing nearly 12,000 pounds (5,443 kg) - began its descent on schedule at 11:59 a.m. EST, dropping 70 feet (21 metres) in 60 seconds.

One of those crystals was engraved with the name of Dick Clark, the American entertainer who hosted a popular television presentation of the Times Square New Year's celebrations for decades.

He died in April of a heart attack. Clark had suffered a stroke in 2004 that sidelined from the New Year's Eve show for the first time since he launched the annual broadcast in 1972.

But he gamely returned to the program the following year, and had continued to announce the annual countdown to midnight.

As part of the city's New Year's Eve celebration, more than one ton of confetti was to be released from the rooftops of surrounding buildings in Times Square.

The end-of-the-year crowds capped a year in which 52 million people visited New York City, the third straight record-breaking year for tourism, city officials said on Monday.

More than a million additional tourists visited the city in 2012 compared to 2011, a 2.1 percent increase, they said.

The first version of the ball in Times Square descended in 1907 from a flagpole. (Additional reporting by Joshua Lott; Editing by Daniel Trotta, James B. Kelleher, David Gregorio, M.D. Golan and Eric Walsh)

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