SO KIEN, Vietnam (AFP) - Tens of thousands of Vietnamese Catholics joined cardinals from overseas on Tuesday to launch a 'Holy Year' in the officially Communist country, hoping to overcome government suspicions.

Roman Catholics from across Vietnam and cardinals from France, the United States and Rome gathered at the church of So Kien, in the village of Phu Ly, around sixty kilometres south of Hanoi, for the inaugural mass.

The 'Holy Year' formally marks the 350th anniversary of Vietnam's first Catholic diocese and the 50th anniversary of the Vietnamese Catholic Church as a hierarchy.

But the Church also hopes the event will energise moves towards reconciliation with the state, possibly leading to a Papal visit, the establishment of diplomatic ties and the restoration of confiscated property.

The Church is also looking for greater freedom for its humanitarian and educational work in the impoverished country.

"With the opening of this Holy Year, we hope for greater consensus and understanding between the government and the Church. We hope for a strong improvement in relations between the two sides," said Father Nguyen Trong Tinh,from the northern province of Nam Dinh.

Raising hopes for reconciliation, Prime Minister Nguyen Tan Dung made a historic visit to the Vatican in 2007. Discussions between the two sides are underway and there are plans for a possible visit to the Vatican next month by President Nguyen Minh Triet, according to diplomats in Hanoi.

"I wouldn't be surprised if he is given the opportunity to come. This would be very significant," said a foreign diplomat, referring to the possibility of a Papal visit and adding that it could happen next year.

The two sides have long been at loggerheads on the issue of property stripped from the Church. The losses started with the end of French colonial rule in 1954 and continued with the country's reunification after the end of the Vietnam war in 1975.

In December 2007 Catholics began a series of demonstrations that centred on the Vatican's former embassy building in Hanoi and spread elsewhere in the country, to demand the return of Church property. Some of these led to clashes with the police.

The state has conceded some property, but not the most significant sites and the issue remains unresolved and highly sensitive.

"We want only to be able to practice our faith and not to be in conflict with the state," said Father Vo Duc Toan, from the town of Dalat in central Vietnam. "Religions in general and Catholics in particular are still not really free in Vietnam. The state still regards us with suspicion."