UPDATE 1-Protesters begin biggest anti-NATO rally in Chicago
(Updates with protest gathering beginning, details)
* Protests not violent so far before summit
* Sunday expected to be biggest protest
* Festive atmosphere
CHICAGO, May 20 (Reuters) - Thousands of protesters, some dressed as clowns and others bearing anti-war signs, gathered on Sunday in a lakefront park in the biggest test yet for Chicago police trying to keep the peace as world leaders began meeting for a two-day NATO summit.
Previous protests in the run-up to the summit Sunday and Monday have been lively but peaceful, resulting in fewer than two dozen arrests over the past six days, according to the Chicago Police Department.
"I think we're going to be able to handle it," Police Chief Garry McCarthy told reporters, adding the numbers of demonstrators this week were fewer than many had expected.
Authorities said two more men were arrested in Chicago earlier this week, bringing to five the number authorities have detained on terrorism-related or bomb-making charges.
Three of those charged were plotting to attack President Barack Obama's campaign headquarters, police stations and other targets, according to court documents. Defense lawyers said the three were entrapped by police informants.
The computer hacking group Anonymous said it had brought down the website for Chicago's police department and another city website to protest the summit. Officials said they were working on the situation.
At the lakefront park, the festive crowd gathering on a hot but breezy day, wielded signs reading "WAR = DEBT, "Billions for jobs, not occupation" and "Peace is Matriotic, Love Your Mother," as a folk singer serenaded them.
Others carried large U.S. flags, some held upside down. At least two circular groups of drummers were pounding away, and dancers in pink and white robes chanted "Hari Krishna." Occupy Chicago anti-Wall Street protesters were made up as clowns and streamed into the park.
The protesters are expected to hear from a lineup of speakers decrying U.S. defense spending and economic inequality, then trek 2-1/2 miles (4 km) along a prescribed route to near the McCormick Place convention center where the summit delegates are meeting, then hold a concluding rally.
VETERANS TO THROW MEDALS AWAY
A group of Iraq war veterans have pledged to toss their medals over the security fence surrounding the summit site in a symbolic protest. Matt Howard, a former U.S. Marine who served in Iraq, said 50 veterans planned to throw away their medals.
Vietnam War veteran Ron McSheffery, 61, said, "I'm in total support of stopping NATO and stopping the slaughter of innocent civilians. If we took the money we spent on bombs and put it into green energy, we wouldn't need to keep the sea lanes open" for oil transport.
The Coalition Against NATO-G8, the group behind Sunday's parade, has said it hopes as many as 10,000 people will show their opposition to the war in Afghanistan by participating in the march.
"Sunday will be the day the protesters get closest to the summit, and it will be the day we see the largest number of protesters," said Jeff Cramer, a federal former prosecutor who now runs the Chicago office of the global security consultancy Kroll International.
"There are certainly going to be arrests and maybe a scuffle or two. I would be surprised if there weren't."
Fears that violence would erupt have so far proved unfounded as police have absorbed torrents of verbal abuse screamed at them by some protesters. Experts credited the low arrest numbers to restraint by both police and protesters.
McCarthy, the police chief, said at the beginning of the week that his goal was to "extract" those protesters who were provocative and let others demonstrate peacefully.
"They're dealing with individuals that are showing signs of aggression. But they're allowing people expressing their opposition to policies to do so," said Arnette Heintze, a former Secret Service agent who is now CEO of Hillard Heintze, a security firm that advised the NATO host committee.
Obama and representatives from some 60 countries are to discuss the war in Afghanistan and other international security issues. (Additional reporting by Ann Saphir, Kyle Peterson, Nick Carey, and Eric Johnson; Writing by Andrew Stern; Editing by Greg McCune and Cynthia Osterman)
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