A steely security blanket enveloped the streets around Hollywood's Kodak Theatre, where the red carpet has already been laid out for the 3,400 stars and film-world luminaries who will attend Sunday's 79th Academy Awards.

With strong favorites in most of the major categories, pre-Oscars buzz has concentrated on the battle for best picture, the last award to be announced at the three-hour ceremony, which begins at 5:00 pm local time (0100 GMT Monday).

Although crime drama "The Departed" is a narrow favorite with bookmakers, analysts say the race is too close to call, even though the film's director, Martin Scorsese, is the odds-on favorite to pick up his first Oscar after being snubbed on five previous occasions.

Many pundits believe that "Little Miss Sunshine," the feel-good independent movie about a dysfunctional family traveling across America, has the best chance of upsetting Scorsese's "The Departed."

Veteran director Clint Eastwood's "Letters from Iwo Jima," a war epic shot entirely in Japanese, and Mexican director Alejandro Gonzalez Inarritu's Golden Globe-winning cross-cultural ensemble drama "Babel" are the other contenders.

The fifth nominee, British royal drama "The Queen," is viewed as the rank outsider, even though the film is likely to deliver an Oscar for lead actress Helen Mirren, whose odds shortened to 1/66 at one stage this week.

Mirren's counterpart in the best actor race, Forest Whitaker, is also considered the strong favorite, having swept all of this year's awards for his portrayal of Ugandan dictator Idi Amin in "The Last King of Scotland."

The biggest threat to Whitaker could be a sentimental swing toward 74-year-old Irish legend Peter O'Toole, who received his eighth nomination for "Venus."

In the supporting actress and actor categories, Jennifer Hudson is expected to win for her memorable turn in the hit musical "Dreamgirls," but co-star Eddie Murphy could miss out to "Little Miss Sunshine's" Alan Arkin, after being the clear favorite earlier this month.

Unlike in many previous years, no one film is expected to dominate across multiple categories.

While "Dreamgirls" received the most nominations (eight), it was overlooked in key categories such as best picture, marking the first time that has happened in the Oscars' 79-year history.

This year's Oscars are being billed as a celebration of the film world's increasing diversity, with nominees hailing from all corners of the globe, while several minorities are also represented.

Nine nations -- Australia, Benin, Britain, Canada, Ireland, Japan, Mexico, Spain and the United States -- have entrants in the acting categories alone.

Meanwhile, a record five black actors are up for Oscars and are tipped to win in at least two of the four categories, while this year's host, comedian Ellen DeGeneres, is gay.

Sunday's ceremony will be watched by a global audience estimated in the hundreds of millions, and organizers believe the nail-biting race for best picture could boost ratings, which have dipped in recent years.

"The talk about this being a wide-open year encourages viewership," said Sid Ganis, president of the Academy of Motion Picture Arts and Sciences.

Organizers have urged winning nominees to keep their acceptance speeches short and sweet, or else risk being drowned out by music as they are ushered off the stage.

Security for the event will see several hundred police officers on duty Sunday, manning barricades, conducting identification checks and searching cars, including celebrities' vehicles.

An increasing number of nominees, however, have eschewed the traditional stretch limos, opting instead for environmentally friendly hybrid vehicles to deliver them to the red carpet.