Liberal reformer Roh Moo-hyun has won South Korea's presidential election after his conservative rival conceded defeat in a closely fought election.

I will try to open a new era for dialogue and harmony Roh Moo-hyun

With more than 90% of the votes counted, the latest results suggested Mr Roh, of the governing Millennium Democratic Party, beat Lee Hoi-chang by about 2.3 percentage points.

Mr Roh, 56, was backed by a younger generation attracted by his policy of engaging with the Stalinist North Korea, while pro-US hardliner Mr Lee had the support of the older generation.

The vote took place amid growing anti-US sentiment, sparked by the acquittal of two US soldiers in the road deaths of two Korean teenage girls.

Roh Moo-hyun

Former human rights lawyer Favours engaging with North Korea Popular with younger voters

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Mr Roh claimed victory in a speech at his party headquarters, as hundreds of his supporters danced and waved balloons.

"I will try to become a president, not just for the people who supported me, but also for the people who opposed me in the election," Mr Roh said, appearing to be on the verge of tears.

"I will try to open a new era for dialogue and harmony."

The US has congratulated Mr Roh on his victory and has insisted that his policy of engagement with North Korea - which Washington has branded part of an "axis of evil" - does not pose a problem.

"The United States continues to support South Korea's policies of having discussions with North Korea," said White House spokesman Ari Fleischer.

"The president looks forward to working closely with president-elect Roh."

Nuclear issue

The Grand National Party candidate Mr Lee, who also narrowly lost the 1997 election, apologised to his supporters.

Mr Lee is now expected to retire from politics

"I once again failed to get the choice of our people," said a tearful Mr Lee. "I did my best, but I fell short," he said.

The campaign was overshadowed by the threat posed by North Korea's nuclear ambitions.

Voters were faced with a clear choice between Mr Roh's policy of continuing outgoing President Kim Dae-jung's "Sunshine Policy", and Mr Lee's policy - favoured by the US - of freezing dialogue until Pyongyang dismantles its suspected nuclear programme.

Some analysts saw the election as a referendum on future ties with North Korea and relations with the US, which has 37,000 troops stationed in South Korea.

Tens of thousands of people have taken to the streets in recent weeks to demand more South Korean jurisdiction over the US troops.

Both Mr Roh and Mr Lee have called for revisions to the accord which governs US troops in South Korea but Mr Roh was seen as less pro-Washington than his rival.

The new president will formally take office in February, when President Kim, limited to one five-year term under the constitution, steps down.

The voter turnout rate was about 70% - the lowest in a Korean presidential election. Many analysts had thought a low turnout would boost Mr Lee, but the result did not bear that out