Mr Abdelaziz said the Polisario's desire for peace was only matched by its determination to free the homeland.
One of the world's most neglected conflicts reached a milestone on Tuesday.
For 25 years, international efforts have been made to resolve the dispute over Western Sahara.
Morocco controls most of the territory and lays claim to it, but supporters of the pro-independence movement, the Polisario Front, have not given up their campaign.
In these windswept camps deep in the desert, they are marking this anniversary of their fight for independence in their traditional way, with unquestioned loyalty to their political movement.
Parade and president
Thousands of people turned out to watch a large military parade at a refugee camp near Tindouf in southern Algeria, and to listen to the president of their self-declared state, Mohammed Abdelaziz.
He was given a rousing welcome when he arrived at the parade ground wearing military fatigues.
Mr Abdelaziz said the Polisario's desire for peace was only matched by its determination to free the homeland.
A report last week by the UN Secretary-General, Kofi Annan, said a climate of increased mistrust and bitterness had set in between Morocco and the Polisario Front.
Mr Annan said this was undermining the ceasefire.
The mood in the refugee camps is one of growing frustration and impatience at the lack of progress towards a political settlement.
Ready to fight
In desperation, many Polisario supporters are calling for a return to war with Morocco after a period of 10 years.
A referendum to decide the territory's future has not been held nine years after it was planned - there's still disagreement over who should be allowed to vote.
The diplomacy is deadlocked and Polisario's dream of independence for Western Sahara seems as far away as ever.
It's not just the refugees who are passing the years living in camps in the Sahara; nearly 1,500 Moroccan prisoners-of-war are still held here by the Polisario as bargaining chips.
Some have been in captivity for more than 20 years.
Like the refugees, they too are the victims of a forgotten conflict.