London has been accepted as an official candidate city for the 2012 Olympics and Paralympics after the shortlist of rivals was reduced from nine to five.
2012 CANDIDATE CITIES
London, Paris, New York, Madrid and Moscow
Rio de Janeiro, Leipzig, Istanbul and Havana
The International Olympic Committee chose London, Paris, New York, Madrid and Moscow to go forward to the final vote next year.
Rio de Janeiro, Istanbul, Leipzig and Havana failed to survive the cut.
The candidate cities must now submit more detailed plans to the IOC ahead of the decision in Singapore in July 2005.
The IOC's evaluation commission will visit all five cities for an inspection in February and March next year, with the possibility of a further cut before the final vote.
"After the evaluation report the IOC will study their findings in May before making a final proposal for the July session," said IOC president Jacques Rogge at the announcement in Lausanne.
London 2012 bid leader Barbara Cassani said: "It is a very special honour to be chosen as a candidate city.
"We will do everything in our power to justify the IOC's faith in London as a potential host."
There was bitter disappointment in Turkey, however, as Istanbul missed out for the fourth time in a row.
"Only three years ago Istanbul was accepted as a candidate city for the 2008 Games - and not now," said bid director Yalcin Aksoy.
"Were there any negative developments? No. On the contrary. What has changed?"
The five candidate cities are now free to incorporate the Olympic rings in their bid logos and begin promoting their cause more intensively.
2012 BIDS - THE KEY DATES
15 Nov 2004: Cities present formal bids to IOC
Feb/Mar 2005: IOC evaluation commission visits cities
May 2005: Commission reports on its findings
6 July 2005: Final vote at IOC congress in Singapore
Paris, which hosted the Games in 1900 and 1924, is currently seen as the favourite, just ahead of London.
France staged the football World Cup in 1998, and the World Athletics Championships in Paris last year were hailed as a success.
Paris has almost half its planned Olympic facilities already in place and the bid centres around established venues like the Stade de France, the Parc des Princes and Roland Garros.
The French capital has also moved the site of its proposed Olympic village, having failed with a bid for the 2008 Games, to make it closer to the city centre.
London is bidding to host the Games for the third time. It was host city in 1908 and in 1948, when it stepped in after the Second World War.
It can make a powerful case for an Olympic legacy as the bid will involve the regeneration of a huge swathe of land in the east of the city around Stratford.
And London's bid team hopes to overcome doubts about transport problems by using the Channel Tunnel rail link to whisk spectators from King's Cross Station and north Kent to the Olympic zone.
New York, which has never hosted the Games before, is the only non-European city to make the cut.
The 2012 Games are believed to have a stronger chance of coming to Europe than North America as the 2010 Winter Olympics will be staged in Vancouver.
Madrid has promised an environmentally-friendly Olympics, but Spain could be hampered by the fact that Barcelona was the host city in 1992.
Rio was axed despite being tipped as an outside bet to win the Games, while Russian capital Moscow had been seen as one of the cities at risk of missing the cut.
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The nine cities were judged on the 50-page detailed questionnaire they submitted in January.
Paris came out on top in the IOC report, based on an overall weighting of 11 technical criteria, ranging from infrastucture to security.
Madrid was ranked a close second, followed by London, New York and Moscow.
BBC sports news correspondent Gordon Farquhar said the report expressed a lower level of confidence in Moscow than in its four rivals.
London was marked better than New York, but behind Paris and Madrid, for transport.
It was given a strong rating for security and finance and a weak one for public opinion.
Istanbul, the former East German city of Leipzig and Cuban capital Havana had always been seen to be fighting an uphill battle.
Havana's bid was considered the least likely to succeed due to its lack of infrastructure and inadequate accommodation.
"This is not an indication that we don't trust these countries," said Rogge.
"Unfortunately we could not retain certain cities because we did not think their files were totally ready."