Schroeder faces more US anger

US Defence Secretary Donald Rumsfeld criticised the way Mr Schroeder's re-election campaign was fought, saying it had poisoned relations between Washington and Berlin.

BBC Washington correspondent Nick Bryant says George Bush has so far failed to telephone the German chancellor to offer congratulations and Mr Rumsfeld pointedly refused to meet his German counterpart at a Nato meeting in Warsaw.

Throughout the campaign Mr Schroeder voiced emphatic opposition to war with Iraq.

His Justice Minister Herta Daeubler-Gmelin is also alleged to have compared President Bush's political tactics with those of Adolf Hitler. Ms Daeubler-Gmelin denies making the comparison.

Mr Schroeder's Red-Green coalition won a razor-thin majority on Sunday night and has now announced that Ms Daeubler-Gmelin will not be included in his new Cabinet.

'Good friends'

The BBC's William Horsley in Berlin says that in addition to repairing their international relations the new government needs to tackle severe economic problems, including high unemployment and low growth.

Apparently unruffled by the rift between Germany and America Mr Schroeder said the two countries remained good friends.

But he said that his views on the question of Iraq were different from the Americans, and that it must be possible for friends to discuss differences openly.

Mr Schroeder had ruled out German participation in any military action against Iraq.

"I think this difference of opinion will remain," Mr Schroeder said. "We will have it out in a fair and open way without in any way endangering the basis of German-American relations. That is my firm intention."

Repairing rift

But Mr Schroeder's overtures received a cool response from the Bush administration.

SPD Social Democratic Party
CDU/CSU Christian Democratic Party / Christian Social Union
FDP Free Democratic Party (Liberals)
Greens Green Party
PDS Party of Democratic Socialism
"I have no comment on the German elections outcome, but I would have to say that the way it was conducted was notably unhelpful," Mr Rumsfeld said at a Nato meeting in Warsaw.

"And as the White House indicated, has had the effect of poisoning the relationship," he added.

Correspondents say that the key figure in repairing the rift will be German Foreign Minister Joschka Fischer.

He was more cautious in his language about the US than Mr Schroeder, taking care in his campaign speeches to praise the US as a partner and friend before stating Germany's opposition to war with Iraq.

Reduced margin

The election turnout was 79.1%, and the results will not be considered final until they are certified in about two weeks' time.

Preliminary official results give Mr Schroeder's Social Democrats (SPD) and the Greens 306 seats in the parliament or Bundestag against 295 for the CDU/CSU led by Edmund Stoiber in alliance with the liberal Free Democrats (FDP).

With former Communists taking two seats, that would give Mr Schroeder an overall majority of nine in the new parliament from 21 in the last election.

The chancellor acknowledged that his party's loss of voter support compared with 1998 - 38.5% now, 40.9% of the vote then - was "very painful".