WASHINGTON - Leading lights of the national Democratic Party on Monday night hailed Cuba's most prominent democracy activist as a standard-bearer of freedom whose ''small fire'' of protest burns brightly on the island.

In a ceremony and dinner, the National Democratic Institute honored Cuban dissident Oswaldo Payá and the Varela Project -- which has petitioned the communist regime of Fidel Castro for greater openness -- with its 15th annual Democracy Award. But the honoring of Payá was bipartisan.

President Bush wrote a letter commending the Cuban activist that was read aloud.

''Your life has been marked by a long tradition and dedication to bringing freedom and democracy to Cuba,'' the Bush letter said. ``The important movement you have inspired has justly earned you the respect of democratic peoples around the world.''

Payá was not present for the event attended by 700. The Cuban government declined him permission to travel.

A second Democracy Award was given to the Organization of American States and its secretary general, César Gaviria. The OAS, the hemisphere's inter-governmental assembly, has taken an active role in defending the right of people in the Americas to live freely.

Madeleine Albright, the former secretary of state who is chairwoman of the National Democratic Institute, hailed Payá for his courage and ''the small fire he has lit in a nation repressed'' and applauded Gaviria for reviving the OAS.

Payá and his Varela Project supporters submitted a petition with about 11,000 signatures to the National Assembly in May that calls for a referendum on open elections, free speech, free enterprise and freedom for political prisoners.

''Fidel Castro must understand that even the most powerful dictator encounters insurmountable dignity in certain people like Oswaldo Payá and members of the Varela Project,'' said Genaro Arriagada, a Chilean who led a citizens' initiative that helped end the 17-year military dictatorship of Gen. Augusto Pinochet in 1990.