(Updates with remaining inductions, quotes, color)
By Chris Michaud
NEW YORK, April 10 (Reuters) - Flamboyant rockers KISS, singer-songwriter Peter Gabriel, grunge band Nirvana and chart-toppers Hall and Oates entered the Rock and Roll Hall of Fame on Thursday but the original KISS quartet did not perform.
Also inducted were country rock star Linda Ronstadt, who suffers from Parkinson's disease and did not attend, and Cat Stevens, the British musician known as Yusuf Islam after converting to Islam and shunning the stage for decades.
The E Street Band, the group behind Bruce Springsteen, was inducted by the rocker through the Award for Musical Excellence.
Two prominent band managers - Brian Epstein for The Beatles until his death in 1967 and the Rolling Stones' Andrew Loog Oldham - rounded out the 2014 roster, each receiving the Ahmet Ertegun Awards for lifetime achievement.
The annual ceremony, to be aired May 31 on HBO, is centered on live performances but the 1970s shock-rockers KISS, known for their outrageous costumes and makeup and hits such as "Rock and Roll All Nite", stayed true to their vow not to perform.
The four inductees did not all comment on the Hall of Fame's decision to honor only the band's original line-up, leaving out current band members Eric Singer and Tommy Thayer.
Founding member Gene Simmons said "We are humbled to stand up on this stage" after induction by guitarist Tom Morello, but did mention by name other KISS members who were not honored.
Paul Stanley, who has also been critical of the Hall's induction process, said "for our fans, this is vindication," echoing Morello's remark that "KISS was never a critics' band, KISS was a people's band."
Morello also observed that the over-the-top theatrical band was noteworthy for influencing acts ranging from Lady Gaga to Garth Brooks and Slipknot.
Gabriel, lead vocalist for the progressive rock band Genesis who later had solo hits such as "Sledgehammer," was inducted by Chris Martin and sang "Digging in the Dirt" with him, followed by his hit "In Your Eyes," from the 1980s youth romance "Say Anything".
He paid tribute to the power of music, which he said "can make you feel so alive ... and think that the world would, could and should be a much better place - and occasionally make you very, very happy."
While Ronstadt was absent, a roster of top female stars paid musical tribute to her oeuvre with Carrie Underwood, Emmylou Harris, Sheryl Crow and Stevie Nicks bringing the audience at a Brooklyn arena to its feet with rousing renditions of "You're No Good," "Different Drum" and "When Will I Be Loved".
Nicks said when she saw Ronstadt perform, she was inspired to become a singer, thinking "That's what I'm gonna do. She was the heart of the matter, she really was."
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Stevens, inducted by Art Garfunkel, kicked off his remarks quipping "I never thought I'd be on the same stage as KISS."
The induction could signal a return to the spotlight after decades of not performing for Stevens, who sang old favorites like "Wild World" and "Peace Train" live on Thursday night.
After the E Street Band held the stage for over an hour, with each member speaking and several songs including "The E Street Shuffle" and "Kitty's Back," Hall and Oates garnered applause with Daryl Hall's quip: "Lucky for all of you there are only two of us."
The duo, one of the most successful in rock history, performed "I Can't Go For That," "You Make My Dreams Come True" and "She's Gone," which Hall halted due to feedback.
"It happens to us, right?" he joked before starting anew.
Nirvana's ceremony-capping induction, in its first year of eligibility, was made by REM's Michael Stipe, who noted "Nirvana captured lightning in a bottle". It was accepted by Krist Novoselic and Dave Grohl.
Founder Kurt Cobain committed suicide in 1994 aged 27, but his widow, Courtney Love, made a surprise appearance and declared: "I have a big speech, but I'm not going to say it."
Instead she thanked the band's "family" and said simply "I wish that Kurt was here," adding "I want to give this (award) to Frances, our daughter."
The group's surviving members took to the stage at the evening's end fronted by Joan Jett for a raucous rendition of "Smells Like Teen Spirit." Sonic Youth's Kim Gordon then joined the Nirvana members for "Aneurysm".
Oldham, who did not attend, said on Twitter: "Like Brian Epstein, I was not consulted as regards this matter, & like dear Brian I will not be going."
The inductees, who will join the Hall of Fame's 719 other musicians and executives as members, were chosen by more than 700 voters from the Rock and Roll Hall of Fame Foundation.
Fans were allowed to cast votes online for the artists they believe were the most deserving of induction, with three of their top five choices making the cut this year. (Reporting by Chris Michaud; Editing by Patricia Reaney, Sofina Mirza-Reid, Mohammad Zargham and Tom Heneghan)