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By Madeline Chambers and Ingrid Melander

BERLIN, March 24 (Reuters) - Supporters of closer European integration used the 50th anniversary of the EU on Saturday to press for a swift overhaul of the bloc to face 21st century challenges such as terrorism and climate change.

Host Angela Merkel hopes the weekend summit will generate new momentum for European unity and the German chancellor said the European Union's 490 million citizens urgently needed clarity about where the enlarged 27-nation bloc was headed.

French and Dutch rejections two years ago of a draft constitution that would have reformed the bloc's creaking institutions triggered a crisis of confidence in the EU.

Merkel, who holds the rotating presidency, has vowed to lay out a "road map" for reviving the treaty.

"Our goal is to show our citizens how to create a revitalised, effective European Union before the next European parliamentary elections in 2009," Merkel said in a weekly podcast. "The people in Europe have a right to know this."

On Sunday, Merkel will unveil the "Berlin Declaration", a statement on EU values and achievements she hopes will set the stage for a relaunch of the constitution.

The two-page declaration sets a 2009 deadline for giving the bloc a "renewed common basis" -- code for institutional reforms to give it a long-term president and foreign minister, a simpler decision-making system and more say for the European and national parliaments.

However, in a reflection of deep divisions about how to move forward, the declaration makes no specific reference to the constitution and avoids mentioning future enlargement -- one factor behind the French and Dutch "no" votes.

Public support for EU membership has declined in many states because of fears the bloc is failing to protect workers from the impact of globalisation, eroding national identities and meddling excessively in national affairs.

To mark the anniversary of the founding Treaty of Rome, festivities are being staged around Europe and the once-divided German capital is hosting two days of street parties, all-night museum shows and open nightclubs.

AT A CROSSROADS

European Commission President Jose Manuel Barroso, who will sign the declaration along with Merkel and European Parliament President Hans-Gert Poettering, hailed the bloc's post-war peace and prosperity and said the EU was at a crossroads.

"In Europe, 2007 is the year when the past and the future meet," Barroso said at a gala concert in Brussels.

"Building on our great past, we must reaffirm that the Union is the best answer to 21st challenges such as globalisation, sustainable economic growth and competitiveness, political solidarity, energy supply, climate change, and security."

The advent of Eurosceptical governments in Prague and Warsaw, as well as persistent public opposition in Britain, the Netherlands and France, mean Merkel's efforts to launch new treaty negotiations will be fraught with difficulty.

In a speech to European bishops on Saturday, Pope Benedict accused the EU of apostasy for refusing to mention Christianity in the declaration.

Merkel and her husband, publicity-shy chemistry professor Joachim Sauer, greeted the other 26 EU leaders and their spouses when they arrived for an evening concert at the Berlin Philharmonic, just south of the Brandenburg Gate.

They listened to conductor Simon Rattle perform "Folk Songs" by Italian composer Luciano Berio and Beethoven's 5th Symphony before heading to a dinner hosted by German President Horst Koehler at his Schloss Bellevue residence.

Nearby, tents with food from all the EU member states lined the Tiergarten park as thousands of revellers prepared for Berlin's biggest party since last summer's soccer World Cup.

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