If you get a breeze, windchimes and a portable water fountain. If you can put up a solid wood fence or brick wall over 6 feet, of course, that would solve it, but not likely you can.

Play music?

Background music, and embrace the city's ambiance. There is nothing duller than a party where you can hear a guy cough in the next room.

Lots of beers, cocktails - enjoy living in the city.

Are you worried that the noise would drown out people trying to quietly talk to each other, or are you worried more about the annoyance of having to listen to traffic no matter what you're doing at the party (playing, eating, swimming)? I guess it depends on the size of your space, but if the concern is the latter, perhaps a clever selection of activities could distract guests from the annoying noise: semi-active party games, participation in the outdoor food-making (smoothie party! with a loud blender! constantly blending!), live entertainment (invite your friend who plays bagpipes), etc.

How long are you going to be in your current place? If you're talking long-term and you can plant stuff, some well placed thick creeping vines like jasmine can grow into a wonderful sound barrier in a year or two.

My neighbor has ran some irrigation lines along the roof of her backyard porch, and when she turns on the hose, it sprays a fine mist of cool water which seems like it would be absolutely divine on hot days. It makes a white-noise "sssssssssssssss" when it's on, which could kill your two birds with one stone.

Plants. If you can line the perimeter of your patio with dense foliage, you can reduce the sound of noise by 5-10 decibels (sounds 50% quieter). Growing up my parents lined our fences with Italian Cypresses and they worked perfectly. They also hold up twinkle lights really well.

You might be able to rent plants for the evening. Try party rental and larger nurseries in your area.

I made a folding screen out of pre-made fence sections to block the noise of my AC...it kind of works but you can definitely still hear the noise. As least you don't have to look at it anymore!

Background music on HIGH! Personally, I think street noise adds to the charm of a party in the city.

1. Embrace the noise as part of city living.

2. Be louder (in a good way). Play music but keep it at a level that is respectful to your neighbors--in content and in volume. If you can, position the speakers in between your party and the street noises. That way, the music blends WITH the street sounds.

3. If possible, build a tall and solid folding screen. Break it out for parties and use it to screen off the source of the noise. Since it's temporary, it can be taller than a permanent fence. Some assembly/disassembly might be necessary.

play ocean sounds as the background noise then maybe the cars will sound like part of the waves :) Maybe I'm biased for a love of luau parties!

I read about some people who put a large plant pot next to a busy street. They placed a microphone into this pot and played the live transmission over a speaker. The acoustics of the vase turned the street noise into amazing music that covered up the traffic noise! It's bizarre but it really works.

Some less unusual ways: fountain, windchimes, privacy screen covered in star jasmine or potato plant, white noise machine.

MOVE

Our house used to back up to a major highway in Atlanta (I-285, if you're familiar). The noise pollution was constant and awful, and made it almost intolerable to be outside.

We installed a cheap, and i mean REALLY cheap, fountain that simply dropped a stream of water about 3-4 feet into a cistern or an urn, and the noise vanished.

The trick is to place the fountain in between you and the other noise, so that all you hear is the pleasant sound. The running water might inspire more trips to the bathroom, but you won't have any problems with street noise.

I'm slightly astounded by the number of passive aggressive responses. They are not very helpful. I understand the problem you have as I have definitely been there myself. Music helps, but I think putting speakers in multiple locations really makes the difference. It will diffuse the unwanted noise and allow the music to encompass the area. Landscaping is another great way to absorb sound. I don't want to assume you have grass in your backyard, so if you don't, that will help.

I think just don't worry bout it. It is never a problem at our house altho we have heavy traffic. Music - lots of people - good food - it will be okay. At another person's party one time an ice cream vendor with a loud sound truck parked right by their patio. Now THAT was a problem....