Ebadi, 56, received the prize from chairman of the Nobel Committee Ole Mjoes at a formal ceremony at Oslo's City Hall.

Dressed in a champagne skirt suit and wearing make-up, Ebadi was not wearing the hijab, the headscarf that under Iranian law is mandatory for all Iranian women, both inside and outside the country.

"All people are entitled to fundamental rights, and at a time when Islam is being demonized in many quarters of the Western world, it was the Norwegian Nobel Committee's wish to underline how important and how valuable it is to foster dialogue between peoples and between civilizations," Mjoes said in his introduction speech.

"This is a wish that most people share and that is why the reactions to this year's award have been so positive, even though we understand if you had perhaps hoped for a few more congratulations from the authorities of your own home country and region," he added.

When the Nobel Committee in October announced that it would award Ebadi the Peace Prize, the Iranian government waited several hours before congratulating the laureate.

And when Iranian reform president Mohammad Khatami finally, after four days, sent out a congratulatory statement, he emphasized that the Nobel Prize was "not very important".

"The Norwegian Nobel Committee is convinced that the Peace Prize has been awarded to the right person, at the right time and in the right place," Mjoes said Wednesday.

"Let us hope that the prize will also inspire changes in your beloved home country, Iran, as well as in many other parts of the world (...) Fundamental values, such as liberty, justice and respect for human rights will -- in all places and at all times -- need vigilant and critical champions," he added.

The Iranian human rights advocate is the third Muslim and the 11th woman to receive the Nobel Peace Prize since it was founded in 1901.

The award consists of a diploma, a gold medal, and a check for 10 million Swedish kronor (about 1.4 million dollars, 1.1 million euros).

Nowegian royals Queen Sonja, Crown Prince Regent Haakon Magnus, and Crown Princess Mette-Marit all attended the ceremony, although King Harald V was absent, recovering from cancer surgery earlier in the week.

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