By Ayesha Rascoe

WASHINGTON (Reuters) - President Barack Obama on Friday designated the site of a watershed event in the history of U.S. gay rights, the 1969 Stonewall riots in New York City, as a national monument, the first to honor the contributions of gay Americans.

The Stonewall Inn gay bar in Manhattan's Greenwich Village was the scene of a police raid that triggered riots and ignited a long struggle to bring lesbian, gay, bisexual and transgender people into the American mainstream and guarantee their rights.

"Welcome to the family," the National Park Service said in a tweet welcoming its 412th site.

LGBT rights advocacy groups hailed the national recognition, saying it will help highlight the gay communities' continued struggles, especially in the aftermath of the June 12 mass shooting at a gay nightclub in Florida that killed 49 people.

"This new national monument will be a source of inspiration to a new generation of Americans across the country standing up for equality and uniting to show the world that love conquers hate," Human Rights Campaign President Chad Griffin said.

The move was the latest of several steps Obama has take on gay rights during his presidency.

In 2010, he signed a law repealing a policy that had banned gays from serving openly in the U.S. military. In 2012, he became the first president to support gay marriage, a stance he has admitted took time to evolve. His administration also supported the legal challenge that led to the 2015 U.S. Supreme Court ruling legalizing gay marriage nationwide.

"There is important distance yet to travel, but through political engagement and litigation, as well as individual acts of courage and acceptance, this movement has made tremendous progress toward securing equal rights and equal dignity," Obama said in a proclamation officially designating the historic site.

The events of late June and early July 1969 in New York helped start the modern American gay rights movement.

A week of violent clashes on Christopher Street between patrons of the Stonewall Inn and police, who had periodically raided the bar, arresting gays under morals laws of the era, became known as the Stonewall riots.

The crackdown was also tied up in a dispute between the Mafia, which owned the bar, and corrupt police officers seeking payoffs for protection. But it unleashed a year of protests, culminating with the first gay pride parade in 1970.

This year's weekend LGBT pride festivities started in New York on Friday with a street fair and were to culminate with Sunday's parade through Lower Manhattan. Events were scheduled across the country in San Francisco, Minneapolis, Oklahoma City and elsewhere.

Obama's designation protects about 7.7 acres (3.1 hectares) of land, including the Stonewall Inn and nearby Christopher Park. U.S. lawmakers representing New York, in a statement, called the site "a beacon for liberation."

It drew renewed attention in the wake of this month's massacre in Orlando at another gay venue, a nightclub called Pulse. Mourners in New York flocked to the inn and created a makeshift memorial after the shooting, the worst such attack in modern U.S. history.

In honor of the new monument, the White House will release a video that will be played on billboards in New York's Times Square on Saturday. U.S. officials will also hold a designation ceremony at Stonewall on Monday.

(Reporting by Ayesha Rascoe and Susan Heavey; Editing by Will Dunham and Dan Grebler)