BANGKOK, Jan 2 (Reuters) - Thailand's Princess Galyani Vadhana, elder sister of revered King Bhumibol Adulyadej, has died six months after entering hospital with cancer, the palace said on Wednesday.

The king declared a 100-day mourning period for palace officials and funerary rites began at Bangkok's glittering
Grand Palace.

Thousands of black-clad Thais queued up to pay their last respects at one of the palace's halls. A government spokesman said a 39-member panel chaired by Prime Minister Surayud Chulanont would decide when the cremation would take place.

The government also asked Thais, many of them still in festive New Year mood, to refrain from staging entertainment events or celebrations.

"It is a great loss for the people so we would like to ask everybody to mourn her departure by cancelling or postponing their fun," minister Dhipawadee Meksawan told reporters after a cabinet meeting.

Politicians bargaining for cabinet seats in a coalition government being formed after the Dec. 23 general election also
refrained from making political comments on Wednesday out of respect for the princess.

The London-born princess was diagnosed with cancer in June and admitted to hospital, but her condition was not made public until October, shortly before King Bhumibol was admitted to the same hospital for restricted blood flow to the brain.

The world's longest reigning monarch was discharged three weeks later, but his illness served as a reminder to many of Thailand's 64 million people of the king's advancing years and increasing fragility.

The country laid on massive celebrations for his 80th birthday in December, just over a year after similar
festivities to mark 60 years on the throne.

During his reign, Bhumibol has been a pillar of stability during often turbulent and bloody politics, including 18
military coups, the last of which in September 2006 ousted Prime Minister Thaksin Shinawatra. Despite limited constitutional powers, he wields enormous personal influence and has waded into politics on several occasions in favour of both democratic and military regimes.

Many Thais are worried for the future after his death as his heir apparent, 55-year-old Crown Prince Maha
Vajiralongkorn, does not enjoy the wide respect accorded to his father.

(Writing by Ed Cropley; Editing by Michael Battye and Roger Crabb)