It was specifically dedicated by King George V, by the suggested of Edward George Honey, on 7th November 1919 as a day of remembrance for the soldiers killed in WWI. Honey also established two ceremonial periods of remembrance based on events in 1917.
The 11th November at 11am signifies the end of WWI, which ended on that date in 1918. Hostilities formally ended at the 11th hour of the 11th day of the 11th month, according to the Armistice, signed by representatives of twenty seven different countries. ("At the 11th hour" refers to the passing of the 11th hour, or 11:00 a.m.) World War I officially ended with the signing of the Treaty of Versailles on 28 June 1919.
The red remembrance poppy has become a familiar symbol of Remembrance Day due to the poem "In Flanders Fields". These poppies bloomed across some of the worst battlefields of Flanders in World War I, their brilliant red colour an appropriate symbol for the blood spilled in the war.
However since then Remembrance Day is used as a day of respect for all soldiers who have lost their lives in battle for our country, from WWI and WWII to the more recent fighting in Afghanistan.
Although the two minutes of silence are observed on 11th November, in the UK it is Remembrance Sunday where the ceremonies at local war memorials are held. The start and end of the silence are often marked by the firing of an artillery piece. The first two minute silence in London (11th November 1919) was reported in the Manchester Guardian on 12th November 1919:
"The first stroke of eleven produced a magical effect. The tram cars glided into stillness, motors ceased to cough and fume, and stopped dead, and the mighty-limbed dray horses hunched back upon their loads and stopped also, seeming to do it of their own volition. Someone took off his hat, and with a nervous hesitancy the rest of the men bowed their heads also. Here and there an old soldier could be detected slipping unconsciously into the posture of 'attention'. An elderly woman, not far away, wiped her eyes, and the man beside her looked white and stern. Everyone stood very still ... The hush deepened. It had spread over the whole city and become so pronounced as to impress one with a sense of audibility. It was a silence which was almost pain ... And the spirit of memory brooded over it all."