Ammon News - (Reuters) - Iranians celebrated into Sunday after moderate Hassan Rohani was elected president in a popular repudiation of conservative hardliners, and he pledged a new tone of respect in Tehran's international affairs after years of increasing antagonism.

Rohani, a Shi'ite cleric and former chief nuclear negotiator with Western powers, received a resounding mandate for change from Iranians weary of years of economic decline under U.N. and Western sanctions and security clampdowns on dissent.

His victory goes some way to repairing the legitimacy of the Islamic Republic, punctured four years ago when an election marred by fraud allegations led to mass unrest, and may give leverage for reformist voices muzzled since then to re-emerge.

But the hopeful reaction abroad was tempered by skepticism that Rohani could overcome the mistrust and alienation prevailing between Tehran and much of the world, and arch-enemy Israel warned against any complacency on Iran's disputed quest for nuclear power.

"The international community must not give in to wishful thinking or temptation and loosen the pressure on Iran for it to stop its nuclear program," Israeli Prime Minister Benjamin Netanyahu said.

He noted that it was Iran's theocratic supreme leader, Ayatollah Ali Khamenei, and not the president who set nuclear policy. Israel, widely believed to have the Middle East's only atomic arsenal, and the West fear Iran is enriching uranium with the aim of developing nuclear arms, an accusation Tehran denies.

Rohani's surprise win will not resolve anytime soon the row with the West over Iran's nuclear ambitions or lessen its support of Syria's president in the civil war there - matters of national security decided by Khamenei.

But the president runs the economy and has important influence on decision-making and Iranians clearly felt change was essential after eight years of President Mahmoud Ahmadinejad, a belligerent, populist hardliner associated with mismanagement, waste and repression.

"This victory is a victory of wisdom, a victory of moderation, a victory of growth and awareness and a victory of commitment over extremism and ill-temper," Rohani told state television, promising to work for all Iranians, including the hardline so-called "Principlists" whom he defeated at the poll.

State TV re-broadcast his victory speech on Sunday and its website quoted him as saying: "With their celebrations last night, the Iranian people showed they are hopeful about the future and God willing, ethics and moderation will govern the country."

ROHANI WARNS AGAINST EUPHORIA

However, he told the state news agency IRNA, "the country's problems won't be solved overnight and this needs to happen gradually and with consultation with experts."

But Rohani said there was a new chance "in the international arena" for "those who truly respect democracy and cooperation and free negotiation".

The United States said it stood ready to engage with Iran to reach a "diplomatic solution" over its nuclear program, even though it - along with Israel - have refused to rule out military strikes against Iranian nuclear sites.

"We respect the vote of the Iranian people and congratulate them for their participation in the political process, and their courage in making their voices heard," the White House said in a statement.

"It is our hope that the Iranian government will heed the will of the Iranian people and make responsible choices that a better future for all Iranians," the White House said.

Celebrating crowds sprang up across Tehran and other major cities as his victory was confirmed.

"LONG LIVE REFORM!"

"Long live reform! Long live Rohani!" the crowds chanted, and "Ahmadi, bye bye!".

Others flashed the victory sign and chanted slogans in favor of Mirhossein Mousavi, the reformist candidate his supporters believe was robbed of the 2009 election by what they say was vote rigging to return Ahmadinejad to office. "Mousavi, Mousavi, congratulations on your victory!" the crowds shouted.

Dozens of people were killed when security forces crushed the protests that followed in 2009. Mousavi and his fellow reformist candidate are still being held under house arrest. Authorities say the election was free and fair.

A woman named Mina told Reuters tearfully by phone: "I haven't been this happy in four years. I feel that we finally managed to achieve a part of what we have been fighting for since the past elections. They finally respected our vote. This is a victory for reforms and all of us as reformists."

Police did not intervene in the celebrations and even laughed and shared jokes with those on the streets, several people present said. By morning, Tehran returned to normal, though residents said the election was still on everyone's lips.

While recognizing the result could signal a change, some analysts however advised caution.

"There is reason to be optimistic about Hassan Rohani's win. He is calm, pragmatic, and more reasonable than most Iranian politicians," wrote Alireza Nader, senior policy analyst at the RAND Corporation think-tank.

"But there is a lot to be cautious about. Rohani is part of the system ... He is not a reformist. He appears as an alternative candidate when compared to people like former President Mahmoud Ahmadinejad. This is a low bar."

Rohani will take up the presidency, the highest elected office in Iran's hybrid clerical-republican system, in August.

Though an establishment figure, Rohani was known for his nuanced, conciliatory approach when he was Iran's chief nuclear negotiator until Ahmadinejad came to office in 2005.

He could act as a bridge-builder between hardliners around Khamenei who reject any accommodation with the West and reformers marginalized for the last four years who argue that the Islamic Republic needs to be more pragmatic in its relations with the world and modernize at home in order to survive.

Rohani's nearest rival was conservative Tehran Mayor Mohammad Baqer Qalibaf, a long way behind with less than 17 percent. Other hardline candidates close to Khamenei, including current nuclear negotiator Saeed Jalili, scored even lower.