Barack Obama seals historic election victory

Barack Obama has told euphoric supporters that anything is possible as he claimed victory and wrote himself into the history books as America's first black president.

Obama swept to the White House after an extraordinary two-year campaign, defeating Republican John McCain.

A smiling Obama, flanked by his wife and two daughters, delivered his victory speech in Chicago.

"It's been a long time coming, but tonight, because of what we did on this day, at this defining moment, change has come to America," Obama, 47, told 125,000 ecstatic supporters gathered in Chicago's Grant Park to celebrate.

"Tonight is your answer."

"The road ahead will be long. Our climb will be steep. We may not get there in one year or even one term, but America – I have never been more hopeful than I am tonight that we will get there," he said.

Rich and poor, black and white Americans have spoken to the world, he said.

"We are always and will be the United States of America. Put your hands on the arch of history and bend it toward a better history."

He hailed his Republican opponent John McCain, calling him a "brave and selfless leader".

Obama will be sworn in as the 44th US president on January 20, 2009 and will face a crush of immediate challenges, from tackling an economic crisis to ending the war in Iraq and trying to overhaul the US health care system.

McCain saw his hopes for victory evaporate with losses in a string of key battleground states led by the big prizes of Ohio and Florida, the states that sent Democrats to defeat in the last two elections.

The win by Obama, son of a black father from Kenya and white mother from Kansas, marked a milestone in US history. It came 45 years after the height of the civil rights movement led by Martin Luther King.

Obama, a first-term Illinois senator, led sweeping Democratic victories that expanded the party's majorities in both chambers of Congress and marked an emphatic rejection of President George W Bush's eight years of leadership.

McCain, a 72-year-old Arizona senator and former Vietnam War prisoner, called Obama to congratulate him and praised his rival's inspirational and precedent-shattering campaign.

"We have come to the end of a long journey," McCain told supporters. "I urge all Americans who supported me to join me in not just congratulating him but offering our next president our goodwill."

News of Obama's win set off celebrations by supporters around the country, from Times Square in New York to Ebenezer Baptist Church in Atlanta, King's home church.

"This is a great night. This is an unbelievable night," said US representative John Lewis of Georgia, who was brutally beaten by police in Selma, Alabama, during a voting rights march in the 1960s.

The Reverend Jesse Jackson, a civil rights leader, joined the celebrations in Chicago, tears streaming down his cheeks.

ECONOMY THE KEY

In a campaign dominated at the end by a flood of bad news on the economy, Obama's judgment on handling the crisis tipped the race in his favor. Exit polls showed six of every 10 voters listed the economy as the top issue.

Obama has promised to restore US leadership in the world by working closely with foreign allies, and has pledged a tax cut for low- and middle-class workers while raising taxes on those making more than $250,000 a year.

McCain would have become the oldest president to begin a first term in the White House and his running mate Sarah Palin would have been the first female US vice-president.

The vice-presidency goes to Obama's running mate, Senator Joe Biden.

In addition to Ohio and Florida, Obama won Virginia, Iowa, New Mexico, Nevada and Colorado – all states won by Bush in 2004. McCain's loss in Pennsylvania eliminated his best hope of capturing a Democratic-leaning state.

The vote capped an epic two-year campaign marked by a rapid rise from obscurity for Obama and a bitter Democratic primary battle with New York Sen. Hillary Clinton, as well as McCain's comeback from the political scrap heap to win the Republican nomination.

Obama hammered his favorite theme throughout the campaign, accusing McCain of representing a third term for Bush's policies and being out of touch on the economy.

McCain's campaign attacked Obama as a tax-raising liberal and accused him of being a "pal" with terrorists.

But in a difficult political environment for Republicans, McCain struggled to separate himself from Bush. Exit polls showed three out of every four voters thought the United States was on the wrong track.

In the fight for Congress, Democrats were making big gains as well, but it appeared they would fall short of picking up the nine Senate seats to reach a 60-seat majority that would give them the muscle to defeat Republican procedural hurdles.

Democrats gained at least five Senate seats and knocked off two-high profile Republican incumbents – North Carolina Sen. Elizabeth Dole, a former presidential candidate and wife of 1996 Republican presidential nominee Bob Dole, and New Hampshire Sen. John Sununu.

Democrats also gained about 25 more House of Representatives seats to give them a commanding majority in that chamber.

- Fairfax Media, Reuters, AAP