Democrats Abroad's Jerusalem branch celebrated through the night
Leaders across the Middle East have congratulated Barack Obama and given him a cautious welcome on his election as the next US president.
Israel said he was committed to its security, while the Palestinians urged him to work for a peace deal.
Iraq's foreign minister said he did not expect a quick US troop disengagement.
And a senior Iranian leader and the Palestinian militant group Hamas both spoke of failings and "mistakes" of outgoing President George W Bush.
The newly-elected Democratic senator faces a raft of issues across the region:
- the status of the US troop presence in Iraq
- concerns about a potentially nuclear-armed Iran
- the fall-out from a recent US raid on Syria
- a push by the incumbent administration to negotiate a deal between Israel and the Palestinians
In Iraq, a senior political adviser to the Iraqi prime minister described Mr Obama's rise to become the first African-American US president as "an unprecedented example of democracy".
Mr Obama was opposed to the 2003 US-led invasion of Iraq and has advocated a swift withdrawal of US troops, but Iraqi Foreign Minister Hoshyar Zebari said he did not expect a policy change "overnight".
In Iran, Gholamali Haddad Adel, a senior advisor to Supreme Leader Ayatollah Ali Khamenei, said the US needed to change its policies "to get rid of the quagmire made by President Bush".
Mr Obama has said he supports unconditional negotiations with Iran, a long-time US foe.
Another aide to Ayatollah Khamenei said there was "capacity for the improvement" of US-Iranian ties, "if Obama pursues his campaign promises", Reuters news agency reported.
'A great leader'
Palestinian Authority President Mahmud Abbas expressed hope that Mr Obama would help "speed up efforts to achieve peace", while one of his advisers called on him to "stay the course" on current US-brokered peace talks.
Foreign Minister Tzipi Livni said Israelis had been impressed by Mr Obama's "commitment to the peace and security of Israel", while outgoing Prime Minister Ehud Olmert said the US-Israeli "special relationship" would be "strengthened" under Obama.
Israeli President Shimon Peres wrote to Mr Obama saying: "Dear Mr President, The world needs a great leader. It is in your making. It is in our prayers. God bless you."
A spokesman for the Palestinian militant group Hamas told AFP news agency that Mr Obama "must learn from the mistakes of the previous administrations" and improve global ties rather than "wave the big American stick".
On the streets across the region, many welcomed the departure of Mr Bush, and his replacement with a man with a Muslim father and Hussein as a middle name.
"This confirms that the US and its people are not racist. The American people chose Obama, who is African [by origin] and whose father is Muslim, to voice rejection of policies of the conservatives in the outgoing administration," Saudi businessman Ali al-Harithi told AFP in Dubai.
Palestinians are hoping for tangible steps in US-sponsored talks
Some expressed great optimism, such as advertising executive Adel Shams in Bahrain: "I believe that he can do something to solve the Palestinian question, and that he will withdraw US troops from Iraq. I also think that he will resolve the Iran nuclear standoff."
But others, like Mohammed Fayad in Gaza, expected little change: "We do not know him. Things are not clear now. We do not know whether he will follow the policy of his predecessor and bow to the Jewish lobby."
And although the left-leaning Israeli press was cautiously positive, many Israelis, such as charity worker Shoshana Bair, feared Mr Obama's allegiance would lie with the Palestinians:
"There's no doubt great apprehension. On the face of things it's frightening," she told AP news agency.