Yoko Ono, the widow of Beatle John Lennon, promoted world peace from a hotel room in Iceland on Sunday -- fully clothed this time -- and revealed plans to award two $50,000 peace grants on Lennon's birthday on Monday.

Ono, who famously held a "bed-in" for peace in a Montreal hotel room with Lennon in 1969, said she will give the LennonOno Grant For Peace to the global medical group Doctors Without Borders and the non-profit Center for Constitutional Rights.

The awards will be presented on October 9 at a ceremony at Hofdi House, the site of a summit between U.S. President Ronald Reagan and Soviet leader Mikhail Gorbachev in 1986.

"These two groups look beyond today's conflicts and destruction and envision a positive future for your society, while working selflessly and tirelessly toward establishing a more peaceful planet," Ono told Reuters in an interview.

"We are at the dawn of peace. There is dawn on the horizon despite dark battles."

Lennon would have been 66 on Monday. He was gunned down by an obsessed fan outside his New York apartment in 1980.

The award will be made just days before the Nobel Peace Prize winner is announced in Oslo on Friday.

Ono said artists must do what they can to promote peace.

"Each of us was born at this time, not by chance, but to fulfil a mission. Our work is not yet done," she said.

The LennonOno Grant was established in 2002 and Ono said she moved the award ceremony to Reykjavik from the United Nations headquarters in New York after discovering the unique beauty of the North Atlantic island.

Former recipients of the award include Israeli artist Zvi Goldstein, Palestinian artist Khalil Rabah, Israeli nuclear technician Mordechai Vanunu and U.S. journalist Seymour Hersh.

Ono also unveiled plans to create a column of eternal light visible from Reykjavik harbor.

The Imagine Peace Tower, an idea Ono conceived more than 40 years ago, will be built on the isle of Videy in partnership with Reykjavik utility Orkuveita Reykjavikur.

The base from which the beam of electric light will rise will be filled with prayers from people of all nations. Its debut is set for Lennon's birthday next year.

Ono said her enchantment with Iceland was based on the fact that the country uses water, not oil, to create light and power and that its heat comes from geothermal energy.