The Muslim Brotherhood's Mohamed Morsi pledged to be a leader for all Egyptians after being crowned successor to ousted strongman Hosni Mubarak in a triumph for the long-repressed Islamist movement.
Official results announced on Sunday gave Morsi victory over Mubarak's last prime minister Ahmed Shafiq with 51.73 percent of the vote, sparking joyous scenes in Cairo's Tahrir Square, epicentre of last year's Arab Spring uprising.
But the celebrations were dampened by a series of moves by the interim military junta that took over on Mubarak's overthrow in February last year to weaken the powers of the new civilian head of state.
US President Barack Obama telephoned Morsi to congratulate him on his poll win but newspapers in Israel expressed concern about the rise to power of an Islamist in the Jewish state's most important Arab treaty partner.
"I will be a president for all Egyptians," Morsi said just hours after he was declared the winner.
"I call on you, great people of Egypt... to strengthen our national unity," he added. National unity "is the only way out of these difficult times."
Morsi, who resigned from the Muslim Brotherhood to take the top job, also thanked the "martyrs" of the 18-day popular uprising that forced Mubarak from power. "The revolution continues," he said.
The 60-year-old engineer vowed to honour international treaties, adding: "We come in peace."
Israeli Prime Minister Benjamin Netanyahu issued a statement saying the Jewish state "respects the results," but Israeli media expressed concern about the Islamist victory.
"Israel hopes to continue cooperation with the Egyptian government on the basis of the peace treaty," the statement from Netanyahu's office said.
But writing in top-selling Yediot Aharonot newspaper, analyst Alex Fishman said: "Israel should be prepared for every eventuality," evoking the possibility of "an Islamist intelligence minister, a re-examination of the peace accords, a collapse of the economic agreements and lack of security coordination."
The right-wing Maariv newspaper echoed those concerns. "The fear has become reality, the Muslim Brotherhood are in power in Egypt," the paper said.
Morsi's election victory came after 18 months of a tumultuous military-led transition from Mubarak's rule, marked by political upheaval and bloodshed.
"The winner of the election for Egyptian president on June 16-17 is Mohamed Morsi Eissa al-Ayat," said the announcement from the head of the electoral commission, Faruq Sultan on Sunday.
Hundreds of thousands of Morsi supporters erupted in celebration in Cairo's Tahrir Square, the symbolic heart of the uprising that brought down the Mubarak regime in February 2011.
Cheering Egyptians waved flags and posters of the Islamist leader, who was jailed during last year's uprising.
"God is greatest" and "down with military rule" they chanted, as fireworks went off over the square.
Across Cairo, cars sounded their horns and chants of "Morsi, Morsi" were heard.
Losing candidate Shafiq, who was widely perceived as the military's candidate, joined the country's military ruler Field Marshal Hussein Tantawi in congratulating Morsi, the official MENA news agency reported.
The interim head of the Coptic Church, many of whose faithful have feared the rise of Islamists, also congratulated Morsi.
UN leader Ban Ki-moon called on him to build strong, independent institutions and develop democracy. and the European Union called on him to reach out to all political and social groups.
Morsi won with 13,230,131 votes to Shafiq's 12,347,380, said Sultan, announcing the official results.
Shafiq supporters, who had gathered to hear the result with his campaign team in the suburbs of Cairo, were devastated by the result.
Some women screamed and others cried as several men held their heads between their hands in despair.
The capital was tense before the announcement, with the city's notoriously busy streets deserted and shops and schools closed.
Extra troops and police were deployed and military helicopters flew overhead.
The road to parliament was closed to traffic, and security was tightened around state institutions as Egyptians waited nervously for the result.
The election had polarised the nation.
While some feared a return to the old regime if Shafiq won, others wanted to keep religion out of politics, fearing that the Brotherhood would stifle personal freedom.
President-elect Morsi was the Islamists' fallback representative after their deputy leader Khairat El-Shater was disqualified from running.
During his campaign he sought to allay the fears of secular groups and Egypt's sizeable Coptic Christian minority by promising a diverse and inclusive political system.
Through Mubarak's three-decade rule, the Brotherhood was outlawed and its leaders often detained, forcing it to field those candidates it did run for office as independents.
But the dispute between the Brotherhood and the military remains unresolved.
The Brotherhood has rejected a constitutional declaration by the military that dissolved the Islamist-led parliament elected in a multi-phase vote through the turn of the year and gave the army a broad say in government policy and control over the new constitution.
The move effectively strips away any gains made by the Islamist group since Mubarak's overthrow.
It was adopted just days after a justice ministry decree granted the army powers of arrest that were strongly criticised by human rights watchdogs.
