Not only was the win likely to increase resistance to US policies in the Middle East and encourage extremism, but it could complicate the European Union's attempts to prevent Iran developing a nuclear arsenal, analysts said.

Britain, France and Germany, the three EU powers that have been conducting the nuclear talks, all called on the new Iranian regime to continue with the discussions under president-elect Mahmood Ahmadinejad.

"I hope that under Mr. Ahmadinejad's presidency, Iran will take early steps to address international concerns about its nuclear program," British Foreign Secretary Jack Straw said in remarks echoed by his counterparts in Paris and Berlin.

Iran must provide solid guarantees "showing that its nuclear programme can only be used for peaceful purposes," German Foreign Minister Joshka Fischer added.

"Economic cooperation will undoubtedly depend on how Iran establishes international confidence and works to maintain it."

French Foreign Minister Philippe Douste-Blazy also expressed the hope that Iran would continue with attempts to stop uranium enrichment, giving it a potential capacity to produce nuclear weapons.

In Brussels, a spokesman for foreign policy chief Javier Solana said the EU was willing to work with any Iranian government that would cooperate in the matters that most concern Europe -- "human rights, non proliferation, the fight against terrorism and the Middle East situation."

In Tehran, a European diplomat said the political earthquake in Iran "moves us into a very uncertain phase."

The EU was due to resume talks on the nuclear issue in late July with the threat of going to the UN Security Council unless Tehran agrees to halt enrichment. Diplomats and analysts in Vienna, headquarters of the International Atomic Energy Agency, have said there would be no softening of the EU demand for Iran to give up enrichment.

But judging from Ahmadinejad campaign rhetoric -- in which he said the time had come for Iran to "impose conditions" -- the negotiations could get much tougher, analysts said.

In Moscow, President Vladimir Putin said Russia was ready to continue nuclear cooperation with Iran, but would also continue working to prevent nuclear proliferation.

A Russian-built nuclear power station is nearing completion at Bushehr, but Moscow is insisting that spent nuclear fuel must be returned to Russia.

Japan, which gets 16 percent of its energy supplies from Iran, also appealed to Ahmadinejad to respond to international concerns about nuclear proliferation.

The United States, which has allowed the EU to take the lead in the nuclear talks, greeted the news of Ahmadinejad's win with skepticism.

It provided "nothing that dissuades us from our view that Iran is out of step ... with the currents of freedom and liberty that have been so apparent in Iraq, Afghanistan and Lebanon," said State Department spokeswoman Joanne Moore.

Some analysts said the election result was a reaction to US policies in the region, and could lead to a growth of extremism in the Gulf. One analyst, Hasni Abidi, said Ahmadinejad "embodies the exact opposite of what Washington is promoting."

In Qatar, political scientist Mohammed al-Misfer said the hardline victory will "be accompanied by a radicalism of the Shiites in the region, which in turn will stir more confessional strife in Iraq."

Other analysts said Ahmadinejad's election would worsen already tense ties with Gulf neighbors and lead to Iran's isolation.

Several governments were concerned not only with the international ramifications of the election result but on the chances for domestic reform in Iran.

Norwegian foreign ministry spokeswoman Anne Kjersti Shaw said Ahmadinejad's victory reflected frustration about low living standards, but added that her government considers "it is vital that a democratic dialogue continues in Iran ... to ensure respect for human rights."

Danish Foreign Minister Per Stig Moeller said Iran stood "before great challenges, both when it comes to modernizing the Iranian society and to relations with the outside world."

Iraqi Shiite political and religious officials in the central shrine city of Najaf hoped Saturday Ahmadinejad would deepen ties with his country's western neighbour.

"The election in Iran was a reflection of the people's will as happened here in Iraq when the masses took to the streets to choose their government," said Abu Sadeq al-Nasiri, an official with Dawa Tanzim Iraq, a member of the United Iraqi Alliance Shiite coalition that swept January's parliamentary election.

The Palestinian leadership respects Iranian voters' choice, negotiations minister Saeb Erakat said Saturday.

"The Palestinian Authority respects the democratic choice of Iranians. This election was an internal affair and we respect its outcome," Erakat told AFP.

Kuwait welcomed the "Iranian people's choice," but called on Tehran to build "stronger bridges" with its Gulf Arab neighbours.

"We welcome any choice taken by the Iranian people to determine their future and elect the leadership that will run their affairs," Foreign Minister Sheikh Mohammad al-Sabah told reporters in parliament.

Lebanese Shiite militant group Hezbollah Saturday hailed the election of Ahmadinejad, saying it was a slap in the face for the United States.

"The Iranian people has one again shown that it possesses an extraordinary vitality in the face of challenges and that it is determined to impose its choice in the presidential election and in the affairs of state," Hezbollah's assistant secretary general, Sheikh Naim Qassem, said.

Afghan President Hamid Karzai welcomed the election and expressed hope that ties between the two neighbours would strengthen.

"The Afghan people join me today in congratulating you and the brotherly nation of Iran on electing you as their new president," Karzai said in a statement.

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