The 70-year-old ruler, credited with playing a key role in the Middle East peace process, died while being treated in the Ibn Sina hospital for pneumonia.

Police ordered the shutters to be closed on shops and buildings in the capital Rabat, leading to reports of panic buying.

The BBC's Jennifer Beckman: "He was dogged by criticism of being an autocratic leader"

His eldest son and successor, Crown Prince Sidi Mohamed, has been proclaimed commander of the faithful and King of Morocco at an enthronement ceremony at the royal palace in Rabat.

Earlier, the crown prince appeared on television to announce the death of his father.

"My father, His Majesty King Hassan, may God bless his soul, died of a heart attack at 1630 (GMT) due to a complication that could not be treated," he said.

The BBC's Nick Pelham: "In the streets there was panic buying as police ordered shutters down"

In a brief message to the Moroccan people the future king, with his younger brother Prince Moulay Rachid at his side, called for "calm and patience."

His funeral will be held on Sunday at King Hassan II Mosque where he will be buried next to his father, King Mohamed V. Services will begin with a midday prayer.

The BBC's correspondent in Rabat, Nick Pelham, says the enthronement of Mohamed VI, less than three hours after the announcement of the death of his father, emphasises the desire in Morocco to ensure a smooth and swift succession.

At the time of his death, King Hassan was the Arab world's longest-reigning monarch and a strong Arab nationalist. At home however, he often faced criticism for his repressive measures against dissidents.

King Hassan had appeared tired after he returned from a recent visit to France.

He was taken to hospital four years ago in the United States suffering from pneumonia, and had respiratory complaints ever since.

'Dear friend'

Tributes to the Moroccan leader came swiftly from those involved in the Middle East peace process.

Former Israeli Prime Minister Shimon Peres said: "He was a visionary, a believer in peace - he supported it, dreamed of it and fought for it."

"I am losing a very dear friend," he added.

Palestinian leader Yasser Arafat declared three days of mourning in the Gaza Strip and the West Bank.

US President Bill Clinton described the king as on of the Middle East's "greatest peacemakers".

"In his honour, we must rededicate ourselves to fulfilling his vision - a just and lasting peace for all the Middle East's children," he said in a statement.

The White House announced later that President Clinton and the First Lady, Hillary Clinton would attend the king's funeral.

Tunisia and Libya declared three days of national mourning on learning of the king's death while French Prime Minister Lionel Jospin and Egyptian President Husni Mubarak expressed their sadness.

Human rights critics

King Hassan has been on the throne since 1961, and was a leading political figure in North Africa.

But his human rights record was heavily criticised internationally.

Our correspondent says Morocco remains a deeply unequal society and King Hassan's legacy is a state which in terms of development has changed only in part since independence from France.

The average Moroccan is illiterate and lives in accommodation without running water or electricity.