(updates with candlelight vigil for victims of Nazism)

By Mark Heinrich

VIENNA, March 12 (Reuters) - Austrians lit 80,000 candles in a sombre tribute to victims of Nazism on Wednesday held in a Vienna square where their forefathers celebrated Hitler's takeover of the country 70 years ago.

The silent vigil in the huge, neo-classical Heldenplatz (Heroes' Square), climaxed a week of commemorations of the "Anschluss", or annexation, of Austria by Nazi Germany -- an early step towards World War Two and the Holocaust.

"I think people here didn't want to passively let this anniversary go by, but rather send a signal countering the Nazi frenzy of 70 years ago in this very place," said Inge Langer, a middle-aged woman who came with her children.

The Anschluss anniversary revived debate about the extent to which Austrians were victims of Nazism or willing accomplices. Most Austrians now agree they were also deeply complicit in the Nazi machinery of war and genocide after decades of denial.

Each candle symbolised one of the estimated 80,000 Austrians, including 65,000 Jews, killed by Nazis. Organisers planned to display the name of every known victim on a screen in the square that flanks the old Hofburg imperial palace.

Austrian Nazis grabbed power on March 12, 1938 as German columns began to cross the border and immediately began purging political foes and persecuting a long vibrant Jewish community.

The Nazi dictator appeared on a Hofburg balcony three days later to formally proclaim the absorption of his homeland in his "Third Reich" before a rapturous crowd of hundreds of thousands.

Wednesday's vigil, which was to continue until dawn on Thursday, was much smaller in size. But participants said their purpose -- to honour the fallen of the past and democratic ethos of the present -- was much greater in spirit.

"NEVER FORGET"

"I was very small when the Anschluss happened so I didn't understand much," said Josef Veit, 74. "But times were tough so all the pageantry was amusing. Tonight is a beautiful response to that, and the fact most people here are young is fitting."

Tara Jahn, 31, said: "My step-grandfather is Jewish. He experienced the horror of that time. I learned about it from him and that's part of what brought me here. Most people know this only as dry history from books. But we must never forget."

Candles across the square were clustered in the shape of crosses, Jewish stars of David, hearts, trees and other symbols of peace, love and understanding between faiths.

A poll this week showed 60 percent of Austrians were weary of talk about the Nazi past and wanted an end to it after six decades of democracy, now anchored in the European Union.

At a special session of parliament on Wednesday, governing coalition leaders warned against the temptation to dismiss Austria's Nazi history as no longer relevant.

"We cannot draw a line under the past because the events of 1938-45 retain resonance today," parliament president Barbara Prammer said, referring to polls in which a quarter of those aged from 14 to 24 still yearned for a "strong leader".

The post-war position that Austrians were only victims of Hitler had proven to be "a fiction of history", she said. But Austria only "belatedly acknowledged injustices" done by agreeing a reparations fund for Jews within the past decade.

"From the standpoint of international law, we were a victim of aggression," Austrian President Heinz Fischer said of the Anschluss. "But it was only made possible by a significant number of fanatical Nazis and Nazi sympathisers here."

The government announced the establishment of a Vienna branch of the Simon Wiesenthal Center, which hunts Nazi war crime suspects and researches the Holocaust.

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