The country is suffering its worst political crisis in a generation after separatists in the wealthy northeastern region voted in a banned referendum on October 1 to split from Spain.
To mark the national holiday, Prime Minister Mariano Rajoy and King Felipe VI attended a traditional military parade in central Madrid.
Armed forces marched along Madrid's Paseo de la Castellana boulevard to commemorate the day that Christopher Columbus first arrived in the Americas in 1492.
In Madrid, cheering crowds lined the streets, waving red and yellow Spanish flags and some crying "Viva Espana!" as air force jets and helicopters swooped overhead.
Javier Corchuelo, a 28-year-old welder, came with his friends from a town southwest of the capital to witness the spectacle.
"With all that is happening I thought it was important to be here," he told AFP. "We have to show that we support Spain."
Rajoy has vowed to do everything in his power to prevent Catalan secession and his government said Wednesday that it would take control of the region if it tried to break away.
The legal validity of the declaration was unclear.
Rajoy told lawmakers that Puigdemont had until next Monday to decide if he planned to push ahead with secession and then until next Thursday to reconsider, otherwise Madrid would trigger constitutional steps that could suspend Catalonia's regional autonomy.
The deadline set the clock ticking on Spain's most serious political emergency since its return to democracy four decades ago.
The region itself is deeply divided on the issue, with polls suggesting Catalans are roughly evenly split on whether to go it alone.
While Puigdemont insists the October 1 referendum gave him a mandate for independence and has said he still wants dialogue with Madrid, Rajoy has rejected calls for mediation and refuses to negotiate on anything until the separatists abandon their independence drive.
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