The Israeli Labour Party leader, Ehud Barak, has said he wants to be a prime minister for all Israelis following his landslide win in the country's general elections.

He told thousands of cheering supporters that the time had come for peace and unity.

"We are one nation," Mr Barak declared to his massed supporters.

He said that in the coming months, Israel would be facing some of the most difficult and fateful decisions in its history, but pledged that those decisions would lead the country to security and peace.

The incumbent Prime Minister, Binyamin Netanyahu, conceded defeat shortly after the polls closed on Monday night.

With nearly all the votes counted, the Labour leader had 56.4% of the vote against 43.4% for Mr Netanyahu, the central electoral commission said.

Final unofficial results were expected later on Tuesday.

In the parallel elections to the Israeli parliament, Mr Barak's Labour Party and its allies were set to be the largest single group.

Correspondents say Mr Barak should have little difficulty putting together a centre-left coalition, without having to rely on powerful religious parties.

In a victory speech at his party's HQ, Mr Barak promised to fulfil his campaign pledge to pull out of southern Lebanon.

"I hope to be able to put an end to the occupation of southern Lebanon within a year," he said.

An hour earlier, northern Israel had been struck by dozens of rockets fired by Hezbollah guerrillas in Lebanon.

Clear margin of victory

Victory for Mr Barak - Israel's most decorated soldier - has raised hopes of a revival of the Middle East peace process.

It prompted warm congratulations from foreign leaders.

Palestinian President Yasser Arafat, US President Bill Clinton and the UK foreign office welcomed the result.

Mr Arafat said he hoped Mr Barak's victory would help revive the troubled peace process. King Abdullah of Jordan also spoke of a bright future.

Waves of Labour supporters gathered at Tel Aviv's Rabin Square, the city's main gathering place named after the late Prime Minister Yitzhak Rabin and the scene of his 1995 assassination.

Over and out

Supporters of the defeated Mr Netanyahu clapped as he announced his intention to resign. He said he wanted to spend more time with his family.

"After the storm of the electoral campaign, it is time for everyone to calm down. I believe that now is the time to take time off," he said.

Mr Netanyahu called the election 17 months early when his coalition could no longer sustain the contradictions between its right-wing ideology and the peace process with the Palestinians agreed by its Labour Party predecessors.

Both contenders had tried to portray themselves as the candidate most able to deal firmly with the Palestinians.

Mr Netanyahu tried hard to paint his rival as soft on the Palestinians, notably accusing the former army chief of staff of being ready to cede parts of Jerusalem.

But in his concession speech, he was more upbeat, recounting the accomplishments of the Likud coalition government.

"We have stopped almost completely terrorism and returned security to the citizens of Israel," he said.

"We turned the economy to free market ... and brought foreign investment to Israel. I hope that they will be the foundations for a better future for us.

Knesset election

Although most attention focused on the prime ministerial race, Israelis also voted for a new parliament, whose composition will have a vast influence over Mr Barak's ability to govern.

Under Israel's electoral system, any party receiving 1.5% of the vote (an estimated 55,000 votes) can take a seat in the Knesset.

Israel-watchers say the Labour landslide is an unprecedented opportunity to unite the Israeli people.

"Ehud Barak's victory diminishes everyone's power but it's also an opportunity," said Ron Dermer, a strategist for the Russian immigrant party, Yisrael B'Aliya.

"This is a unique opportunity that neither Rabin or Netanyahu had because they governed with a narrow coalition. Barak has a very important role to play in uniting the state of Israel and I think he can do it."

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