SINGAPORE (Reuters) - Some 6,000 people turned out for the start of a three-day gay and lesbian festival in Singapore -- where homosexual acts are still illegal -- making it Asia's largest gay event, its organizers said Sunday.

"Nation.04" -- a festival of international DJs, podium dancers, pumping music and muscular boys stripping off their tops on packed dance floors -- has increased in size every year since it was launched four years ago, said organizer Stuart Koe.

"Last night's turnout was really higher than expected," he told Reuters. About half the 6,000 were foreigners from other Asian countries and the United States, said Koe, who runs Fridae.com, Singapore's main gay and lesbian Web site.

The size made it Asia's largest known gay festival, he said.

The festival is at odds with Singapore's image as a strait-laced city state, but the government has turned a blind eye to the growth of an entertainment industry catering for homosexuals, quietly acknowledging the potential of the "pink dollar." Singapore still has a law that criminalizes consensual homosexual acts -- Penal Code section 377A states that acts of "gross indecency" between two men are punishable by up to two years in jail.

But in January the government said it planned to review its sex laws, and would probably decriminalize oral sex -- but only between men and women.

Nation.04 kicked off with a "Make Love Not War" party on Saturday, a politically loaded theme in a country where organized protests are illegal without a permit and where the government staunchly supported the U.S.-led war on Iraq.

"Singapore is making very big moves in liberalizing. People here feel a lot more empowered than before to take risks and to speak their minds," gay rights activist Alex Au told Reuters.

Most Singaporeans expect the gradual relaxation in social controls and official attitudes toward alternative lifestyles to continue, though relations between the gay community and the state remain awkward, partly because of the sex and censorship laws.