Fijians erupted in celebration Friday, setting off flares and dancing in the streets while a national holiday was declared after the tiny nation won its first ever Olympic medal -- and gold at that.

The South Pacific island country came to a standstill at the start of the rugby sevens final against Great Britain, and by half-time the fireworks had started and there was a monumental chorus of car horns as it became evident Fiji would win and create history.

"This is the biggest day in Fiji's history. Everyone is celebrating," said photographer Feroz Khalil who watched the final on the big screen at the main stadium in Suva.

"It was crazy. There were people chanting, crying, tears were flowing. I'm feeling so happy."

Prime Minister Voreqe Bainimarama, who was in Rio de Janeiro to watch the final, announced there would be a public holiday on August 22, the day after the team arrive home.

In a message to the nation Bainimarama said "every Fijian is rejoicing" around the world.

"Never before has the Fijian spirit soared so high as it does today. Never have we stood so tall as a nation."

Fiji Rugby Union chief executive John O'Connor told AFP nearly all of Fiji's 900,000 residents would have gathered around television sets in the 110 populated islands to watch the historic event.

"Everyone is very excited. Wherever there was a TV in a village there were people gathered round. There were about 2,000 people packed in the main stadium watching the game on the big screen.

"Some people may go to work now but I don't think they will be very productive."

Many who did go to work finished early to join the festivities as the blue Fijian flag flew proudly from homes, businesses and vehicles.

Fiji scored first after just 55 seconds, led 29-0 at half-time and finished up thrashing Great Britain by an emphatic 43-7.

"By the time it was half-time people were already celebrating. It was amazing," Khalil said.

Traffic was gridlocked in the capital Suva where the streets were filled with people singing and dancing.

In the rugby-obsessed island nation, the gold medal victory was also seen as a chance to put behind them the memories of four coups over the past 30 years of political upheaval.

"The win was truly a historic moment for Fiji," said Shailendra Singh, a former sports journalist and now head of journalism at the University of the South Pacific in Fiji.

"The sevens game is more than a game in Fiji and it is a major unifying force.

"The entire nation, young, old, men, women, children and adults and people from across the political divide will come together in celebration."

It is only the second Olympic medal won by a South Pacific island nation, following the silver claimed by Tongan boxer Paea Wolfgramm who lost the super heavyweight final to Wladimir Klitschko at the 1996 Olympics in Atlanta.