Updated from 4:36 p.m. EST
U.S. forces captured deposed Iraqi leader Saddam Hussein in a raid on a farmhouse near his hometown of Tikrit on Saturday night, delivering a big prize to president Bush and a political problem to the Democrats.
No shots were fired in the "Operation Red Dawn" raid by troops of the 4th Infantry Division, and DNA tests were conducted to confirm Hussein's identity. Troops reported finding no communication equipment at the house, suggesting Hussein was not directing the guerrilla campaign that has cost hundreds of American soldiers their lives in the war's aftermath.
In a White House address early Sunday afternoon, President Bush said the capture of Saddam "marks the end of the road for him" and that "the dictator of Iraq will now face the justice he denied to millions."
During the brief speech, the president also said the people of Iraq "would not have to fear the rule of Saddam Hussein again" and called upon them to use the momentous event as a reason to " reject violence and build a new Iraq."
Markets worldwide were reacting positively to the capture.
futures were up about 1.5% in electronic trading on the Chicago Mercantile Exchange while in Japan, the Nikkei 225 was up 272 points, or 2.7%, to 10,442.. Hong Kong's Hang Seng was up 116, or 1%, to 12,711, and Singapore's Straits Times was up 14 points, or 0.8%, to 1743.
The dollar was up about a penny against the euro to $1.2194, while the 10-year Treasury note was down half a point, its yield rising to 4.30%. Crude was down almost 4% and gold was off 2%.
British Prime Minister Tony Blair, President Bush's top ally, was also jubilant Sunday. "The shadow of Saddam is finally lifted from the Iraqi people," he said. But Blair called not just for rejoicing, but for reconciliation among the nations that have been deeply divided over the war.
Hussein, looking bedraggled, was wearing a scraggly gray beard and appeared considerably older than images of him before the American attack on Iraq commenced in March.
Hussein was hiding in a 6-by-8-foot hole below the farmhouse, in the town of Adwar, about 10 miles from Tikrit, coalition fores said.
Television images showed raucous celebrations in the streets of Baghdad, with many Iraqis chanting and waving new national flags.
The capture, after a massive eight-month manhunt, is a major victory for the U.S. and its coalition allies, in a war that has caused fissures between America and some of its European allies. The Iraqi occupation also has become a major political issue in the U.S. presidential campaign.
"We got him," L. Paul Bremer III, the American administrator in Iraq said at a news conference in Baghdad. "The tyrant is a prisoner."
The apprehension of Hussein, who had a $25 million bounty on his head, focuses attention on the other man most-wanted by the U.S. -- fugitive al Qaeda leader Osama bin Laden.
Most of the world's major asset markets were closed when word of the capture arrived early Sunday. One exception was Israel, where the TA-25 index added about 3.4%, popping on the Hussein news. Egypt's Case 30 rose 3.3%.
U.S. stocks are expected to rise, at least temporarily on Monday, but the more obvious implications of Saddam's capture are political.
Republicans were quick to seize their victory on Sunday. "With Saddam gone, maybe there will be another opportunity to re-look at the situation and understand that it is in everybody's best interest to participate in this process," said Sen. Rick Santorum, a high-ranking Republican from Pennsylvania.
Democrats also cheered the reports. The front-running candidate to challenge President Bush in 2004, former Vermont Gov. Howard Dean, has been a vocal opponent of the war. That was an advantage when the military campaign in Iraq was dragged down by mounting casualties. But now that Saddam is captured, Dr. Dean's anti-war stance is more tricky.
Dean said Saddam's capture wil likely change the course of the occupation of Iraq. "I think the first order of business is to say this is a great day ... for both the American military and the American people and for the Iraqi people." He also called the capture a "real opportunity to internationalize the effort in Iraq."
But Sen. Joe Lieberman, a Democratic presidential candidate who has been losing ground to Dean, took aim at his party's front-runner.
"If Howard Dean had his way, Saddam Hussein would be in power today, not in prison," Lieberman told NBC's
Meet the Press