Witnessed by a huge crowd of more than two million people in an unprecedented endorsement of a new leader, Obama, 47, became the 44th President of the United States as he took the oath of office at the US Capitol.

"I, Barack Hussein Obama, do solemnly swear that I will execute the office of President of the United States faithfully and will to the best of my ability, preserve, protect and defend the constitution of the United States, so help me God," said Obama, sparking a massive roar from the crowd and a 21-gun salute.

In his inaugural address, Obama said : "we have chosen hope over fear, unity of purpose over conflict and discord,"

Many among the crowd on the National Mall, estimated by the Washington Post at two million people, wept as the new president spoke.

"Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America," Obama told a nation locked in the worst economic crisis since the 1930s Great Depression.

The new president also sent an immediate message to the rest of the world, and Islamic nations, after eight years in which have seen America's ties with some of its top allies tarnished, especially after the Iraq War.

"America is a friend of each nation and every man, woman, and child who seeks a future of peace and dignity, and that we are ready to lead once more."

"To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect."

"We understand that greatness is never a given, it must be earned."

But he also warned that those who would use "terror" and slaughter innocents to threaten the United States would face an uncompromising response.

"We say to you now that our spirit is stronger and cannot be broken; you cannot outlast us, and we will defeat you."

Obama called on Americans to launch a "new era of responsibility" as the economy sinks deep into recession, brought on by massive stocks of bad mortgages and debt.

"Our nation is at war, against a far-reaching network of violence and hatred," Obama said.

"Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some, but also our collective failure to mark hard choices and prepare the nation for a new age."

He also signaled a sharp shift from Bush administration anti-terror policies which critics say have comprised US ideals and the constitution.

"As for our common defense, we reject as false the choice between our safety and our ideals."

He said that the United States would begin to "responsibly leave Iraq to its people and forge a hard earned peace in Afghanistan.

The new president also said the United States would join other nations in rolling back "the specter of a warming planet."

Watched by outgoing President George W. Bush, who spent eight tumultuous years in the White House, Obama was sworn in in front of a massive flag-waving crowd estimated at least a million people on Washington's National Mall.

Millions of foreigners also tuned in to see the son of a black Kenyan father and white American mother take office, in a generational power shift that will see Obama inherit economic blight and challenges to US power abroad.

In the distance was the Lincoln Memorial, which Obama was to see shortly as he gazes out across the crowds to give his inaugural address, dedicated to the revered president who ended slavery and laid the foundation for Obama's presidency.

Among policy actions expected this week is an order from Obama that will set in train the closure of Bush's "war on terror" internment camp at Guantanamo Bay.

Obama's moment in history was being closely watched abroad.

Pope Benedict XVI sent a message calling on the 44th president "to promote understanding, cooperation and peace" among nations.

French President Nicolas Sarkozy said he was eager to work with Obama to "change the world" while German Chancellor Angela Merkel wished him "the best of luck."

A BBC poll of people in 17 countries found an average of two-thirds believe Obama will improve frayed relationships between the United States and the rest of the world.

But with expectations running high at home and globally, Obama's team is pleading for patience as it confronts a groaning in-tray of challenges from Gaza to Guantanamo.

Vast, multi-racial crowds had braved freezing cold to cram the National Mall more than five hours before Obama was to take the oath of office.

Some 318,422 people jammed the Washington subway system early Tuesday heading to the inauguration, a transport official said, noting the figure was much larger than a normal work day.

The former Illinois senator was set to step up to a dais in front of the building just before noon (1700 GMT) to assume power from Bush after two terms marked by stark political division.

Obama has vowed to hit the ground running as soon as he takes office, pushing an 825-billion-dollar stimulus package to lift the US economy and vowing to repair the tattered US image abroad.

The new president has also offered talks with US foes like Iran and vowed to put the United States at the forefront of the struggle to battle global warming.

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