The ceremony marked the start of construction on the 1,776-foot Freedom Tower, designed as a twisting glass and steel tower that evokes the Statue of Liberty, including a 276-foot spire resembling her torch.
Gov. George E. Pataki said he chose July 4 to begin rebuilding to show that the terrorists who attacked New York on Sept. 11, 2001, didn't destroy America's faith in freedom.
"Let this great freedom tower show the world that what our enemies sought to destroy - our democracy, our freedom, our way of life - stands taller than ever before, " Pataki said. "In less than three years, we have more than just plans on paper ? we place here today the cornerstone, the foundation of a new tower."
The cornerstone put in place Sunday is garnet-flecked granite from the Adirondack Mountains. Garnet is the New York state gemstone.
It is inscribed: "To honor and remember those who lost their lives on September 11, 2001 and as a tribute to the enduring spirit of freedom. ? July Fourth, 2004."
Among the several hundred people at the ceremony were relatives of some of the people killed in the terrorist attack.
"It's a new beginning," said John Foy, whose mother-in-law was killed. "We all need to move on and rise above this."
Completion of the Freedom Tower is scheduled for 2009, and trade center leaseholder Larry Silverstein has plans to build four more towers between 2009 and 2015.
Also planned for the site are a rail hub, a memorial that transforms the twin towers' footprints into reflecting pools, and cultural space including several small theaters.
The Freedom Tower is set to rise in a corner of the site that still holds the ruins of a parking garage. At 1,776 feet, a height meant to evoke the year of America's independence, it will be the tallest skyscraper in the world, organizers say.
The current tallest building is the 1,676-foot-tall Taipei 101 in Taipei, Taiwan, which includes a mall, office space and an observatory. It was completed in October with the installation of a pinnacle atop the 101-story building.
The Taipei building is about 165 feet taller than the world's former highest office building, the Petronas Towers in Kuala Lumpur, Malaysia. The highest freestanding tower remains the CN Tower, a 1,815-foot communications structure and outlook point in Toronto.
The 110-story World Trade Center towers were 1,350 feet tall.
Critics have questioned whether all five towers of the Trade Center complex will be built, especially after a jury verdict this year cut the insurance proceeds Silverstein is seeking to pay for the development from a possible $7 billion to a maximum of $4.5 billion.
Silverstein still hasn't signed an anchor tenant for the Freedom Tower, but said he has more than enough money to complete it with insurance proceeds. He has said he will use "traditional financing methods" to pay for the rest of the development.