A self-proclaimed religious fundamentalist, Tehran mayor Ahmadinejad promised he would "build up an exemplary, developed and powerful Islamic society" following his trouncing of moderate cleric Akbar Hashemi Rafsanjani.

"Today, all competition should turn into friendship. We are part of a big family that should go hand in hand to build our proud Iran," the 49-year-old told state media.

He called for national reconciliation after a bitter election race marred by allegations of rigging. But Rafsanjani reacted furiously to his defeat, which he blamed on a massive "illegal" operation using all the means of the regime.

Final results gave Ahmadinejad 61.69 percent against Rafsanjani's 35.92 percent. Turnout of the 46.8 million eligible voters was reported at 59.72 percent, slightly lower than last week's first round of the vote.

Ahmadinejad's win gives anti-Western ultra-conservatives complete control of every elected and unelected institution in Iran and effectively slams the door on any chance of short-term reconciliation with the United States.

The hardliners have urged a more confrontational stance in a tense nuclear stand-off with the international community, arguing that Iran has a "legitimate right" to press on with nuclear work regardless of the consequences.

British Foreign Secretary Jack Straw demanded from Iran "early steps to address international concerns about its nuclear programme", while his German counterpart Joschka Fischer said Iran had to show its atomic plans were only for peaceful purposes.

French Foreign Minister Philippe Douste-Blazy said he hoped "the newly elected Iranian authorities will continue the work that we European diplomats began with the aim of suspending nuclear activities".

Rafsanjani, who had promised to press on with detente and reforms, was seen as a more liberal negotiating partner in the EU-Iran nuclear talks and his defeat removes a moderating influence within the 26-year-old theocracy.

The 70-year-old ayatollah, whose embarrassing result could end his long political career, was not going down quietly.

"All the means of the regime were used in an organised and illegal way to intervene in the election," he said, lashing out in thinly coded language at the unelected Guardians Council that oversees the election.

Rafsanjani and two reformist candidates beaten in last week's first round had already accused well-financed hardline regime elements such as the Guardians Council, the Basij militia and Revolutionary Guards of rigging the polls.

The regime has insisted the elections were proper while outgoing reformist President Mohammad Khatami said the results had to be respected.

The United States was quick to scorn Iran's ruling clergy, with the White House expressing support for "those who call for greater freedom for the Iranian people."

Ahmadinejad will become the first non-cleric to hold Iran's presidency since 1981, a fact of little meaning to those who fear he will take away social liberties that have been gained in the past eight years.

He has insisted that freedom in Iran "is already beyond what could be imagined".

Iran's religious right has been angered over the "Westoxication" seen under Khatami, such as an easing of the strict Islamic dress code, unmarried couples flirting in the streets, increased foreign involvement in the economy and a less radical approach to international affairs.

Supreme leader Ayatollah Ali Khamenei boasted the United States had been "humiliated deep inside" by the election.

"You illustrated the secret of your solidity and power against the expansionist policies of the arrogance of the world," Khamenei said.

Ahmadinejad, a veteran of the elite Revolutionary Guards, gained momentum thanks to his austere image as a God-fearing public servant who made a direct appeal to Iranians suffering from unemployment, inflation and corruption.

He promised the Middle East's most populous nation that oil wealth would be more fairly distributed. On Saturday he again described himself as a humble "street sweeper", and pledged to clean up the oil sector.

Rafsanjani, by contrast, is widely seen as being fantastically rich, and struggled to win support from many voters disenchanted with Iran's political elite.

Many critics of the regime, such as Nobel Peace Prize winner Shirin Ebadi, dismissed the election process as fundamentally flawed and chose to boycott.

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