BEIJING, Sept 30 (Reuter) - China hailed on Saturday the establishment 40 years ago of the Xinjiang Uighur Autonomous Region in its heavily Moslem far west, but warned that autonomy could not allow independence or foreign-directed "splittism."

State media gave extensive coverage to the arrival in the Xinjiang capital Urumqi of a senior Communist Party, state and army delegation from Beijing to mark the 40th anniversary, which coincides with China's October 1 National Day.

China formally set up the Xinjiang Uighur Autonomous Region on October 1, 1955, giving nominal autonomy to its largely ethnic Uighur population, which is overwhelmingly Moslem.

In reality, the arid region is ruled with an iron grip from Beijing, which hand-picks loyal provincial leaders and maintains a constant vigil against religious or ethnic separatism.

Since the Soviet collapse, Beijing has battled a steady undercurrent of dissent in Xinjiang as neighbouring Kazakhstan and other ex-Soviet republics, basking in new religious and political freedoms, increase what China fears could be destabilising contacts with ethnic kin in the vast region.

A page-one editorial in the party mouthpiece People's Daily said Xinjiang's future was filled with hope but still under threat from pro-independence "splittists" at home and abroad.

"We must take a clear-cut stand against ethnic splittism to defend the nation's integrity," the editorial said.

"Hostile powers abroad are collaborating with internal splittist factions in a vain attempt to split Xinjiang away from the motherland," it said. "We must keep a high state of alert and a recognition of the protracted nature, great scope and complexity of our struggle."

People's Daily said Xinjiang's 16 million people, whether ethnic minorities or the predominant Han race, were united in their belief that "only socialism can save and develop China."

"It is only through socialism that Xinjiang has a today and is able to march toward a wondrous future," it said.

China has waged a sometimes brutal campaign to counter Moslem and ethnic nationalism, using troops to crush uprisings and pressuring surrounding republics to crack down on Xinjiang separatists operating from their territory.

At the same time, the Communist Party's propaganda machine strives to portray Xinjiang, neighbouring Tibet and other restive ethnic minority regions as multi-cultural oases whose people are happy with their Chinese nationality.

The Beijing delegation led by Jiang Chunyun, a vice-premier and party Politburo member, and General Yu Yongbo, People's Liberation Army political commissar and member of the party's elite Central Military Commission, arrived in Urumqi to what the Xinhua news agency described as a gala welcome.

"Local people in festive costumes warmly greeted them, waving bouquets and ribbons and performing ethnic dances to the accompaniment of horns and drums," it said, saying thousands of people lined the route to the visitors' hotel.

"The major thoroughfares of Urumqi were decorated with flowers and colourful balloons, and welcoming banners hung at the airport and alongside the road, with greetings in both Chinese and the Uighur languages," the agency said.