Foreign Secretary Jack Straw has held onto his Blackburn seat with only a slightly reduced majority.
Jack Straw said it was a "terrific victory"
Many Labour campaigners feared an anti-war backlash from Muslim voters would affect the result.
But while Mr Straw's majority fell from 9,249 majority to 8,009 he held on quite comfortably.
He said: "I can't remember an occasion when Blackburn has had quite so much press attention, with predictions that Labour might even lose."
"We didn't lose. We had a terrific victory and the fact of the victory is down to the strength of the Blackburn Labour Party.
Mr Straw added: "In this multi-racial, multi-ethnic town, it is the strongest of all organisations in bringing faiths and communities together."
Muslims make up around 25% of Blackburn's 100,000-strong population and there had been speculation that they would turn on Labour as a result of the unpopularity of the Iraq war.
But while the Liberal Democrats increased their vote from 3,264 in 2001 to 8,608 they failed to make the breakthrough.
'Mountain to climb'
Liberal Democrat candidate Tony Melia said: "It was a mountain for us to climb and I think we have had a remarkable result.
"It shows people are interested in our policies and next time we will be better and back."
The Tory candidate, Imtiaz Ameen, polled 9,553 while the BNP's Nicholas Holt recorded 2,263 votes.
Turn-out at the Blackburn poll was 56.88%, compared with the 2001 figure of 55.5%.