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Supporters and opponents of the war in Iraq welcomed the capture of Saddam Hussein but questions about the way forward colored the jubilation, with several nations looking for an early end to the U.S.-led occupation.

France, Russia, Germany and Indonesia, all fierce opponents of the U.S.-led war to oust Saddam, lauded the Saturday arrest by American forces who stumbled on the deposed Iraqi leader in an underground hideout and captured him without firing a shot.

Two US soldiers from the 4th Infantry Division show a box with 750,000 US dollars found where Saddam Hussein was captured.  [AFP]

But many Palestinians, who saw Saddam as a hero, reacted with disbelief and gloom. A leader of the militant Hamas group dubbed the capture an insult to Arabs and Muslims, and predicted that the United States would pay a high price for its action.

Asian stocks jumped, gold and bonds fell and the dollar rose on Monday as markets celebrated the news, but any gains were expected to be fleeting as investors worried about global security and U.S. deficits.

"This is a major event which should strongly contribute to the democratization and the stabilization of Iraq and allow the Iraqis to once more be masters of their destiny in a sovereign Iraq," French President Jacques Chirac said on Sunday.

China, another opponent of the war and an influential Security Council member that favors a strong U.N. role in Iraq, took a similar line.

"We hope that the latest development of the situation in Iraq is conducive to the Iraqi people taking their destiny into their own hands," the official news agency, Xinhua, quoted Liu Jianchao, spokesman of the Foreign Ministry, as saying.

Indonesia, the world's most populous Muslim nation, Bangladesh and Thailand expressed similar hopes.

"It is our hope that his capture will help speed up the process of reconciliation and the transition toward a democratic government of Iraq, where sovereignty is restored in the hands of the Iraqi people," Indonesian Foreign Ministry spokesman Marty Natalegawa said.

BOOST FOR BUSH

The capture of Saddam was a huge boost for George W. Bush and Britain's Tony Blair, his main ally in the war. Both leaders have seen their popularity hit by an increasingly messy occupation.

Bush hailed the end of "a dark and painful era" in the history of Iraq but he cautioned against expecting a sudden drop in violence that has killed more American soldiers in Iraq than the war itself did.

"Let this be more than a moment for simply rejoicing. Let it be a moment to reach out and reconcile," Blair told reporters, before declining to take questions.

German Chancellor Gerhard Schroeder took a similar line in a telegram to Bush. "I hope the capture will help the international community's effort to rebuild and stabilize Iraq," he wrote.

Saddam, whose two sons died in a July gunbattle with U.S. troops, had no close allies abroad.

Arab and Middle Eastern leaders who had opposed the war shed no tears for him. "Saddam Hussein was a menace to the Arab world" said the Saudi ambassador to the United States, Prince Bandar bin Sultan.

Gunfire crackled in celebration around Baghdad and across Iraq. Kuwaitis, whose occupation by Saddam sparked the U.S.-led Gulf War in 1991, were elated.

"Until he was finally killed or captured, there was always the fear he would come back. This will lift an enormous psychological burden off the Iraqi people," Australian Prime Minister John Howard said.

A spokesman for U.N. Secretary-General Kofi Annan said the arrest could give fresh impetus to efforts to pacify Iraq.

SAFER IRAQ?

South Korea welcomed the news, which came hours after its government made a final decision to send 3,000 troops to Iraq.

Japanese Prime Minister Junichiro Koizumi, who is mulling when to send troops of his own, expressed the hope that Saddam's capture would help make Iraq a safer place.

"We hope this will lead to an improvement," he said, adding that any dispatch of troops would depend on security in Iraq.

There was no immediate word from North Korea, which Bush once described as part of an axis of evil with Saddam's Iraq and Iran.

Iran, whom Saddam fought for most of the 1980s, joined in the call for the fallen dictator to pay for what he had done.

"Saddam should be prosecuted because of the crimes he has committed against the Iraqi and Iranian people," Vice President Mohammad Ali Abtahi said.

While many Iraqis welcomed the capture of Saddam, many Palestinians, who saw him as one of the few Arab leaders to stand up to Israel, expressed shock.

As Israeli Prime Minister Ariel Sharon telephoned Bush to congratulate him, Palestinian President Yasser Arafat and his government refrained from comment.

Abdel-Aziz al-Rantissi, a senior Hamas leader, said the United States would "pay a very high price for the mistake" of capturing Saddam."

In Afghanistan, talk turned almost immediately to the hunt by U.S.-led forces for Osama bin Laden, the al Qaeda leader who has evaded efforts to track him down for more than two years.

Radical Muslims in Indonesia focused their anger on the U.S. presence in Iraq.

Irfan Awwas, executive chief of the Indonesian Mujahedeen Council (MMI), accused the United States of tyranny there. "The U.S. must leave Iraq because they suck the blood and wealth of the Iraqi people," he said.

But the head of 40-million member Nahdlatul Ulama, Indonesia's largest Muslim organization, praised the capture as a U.S. achievement. "After this, the U.S. must leave Iraq, and quickly," Hasyim Muzadi said.

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