Incoming Labor Prime Minister Kevin Rudd, a Mandarin-speaking former diplomat, has pledged closer Australian ties with overseas allies and unity at home after ending 11 years of conservative rule under John Howard.

Rudd, 50, presented himself as a new-generation leader by promising to pull about 500 frontline Australian troops out of Iraq and sign the Kyoto Protocol on climate change, further isolating Washington on both issues.

"To our friends and allies around the world, I look forward as the next Prime Minister of Australia to working with them in dealing with the great challenges which our world now faces," he told cheering supporters at a victory party late on Saturday.

The surge to Labor left Howard battling to win even his own parliamentary seat, which he has held since 1974. He was in danger of becoming the first prime minister since 1929 to lose his constituency.

As part of Rudd's promised "fresh thinking", he also teamed with a female deputy, former lawyer Julia Gillard, who will be Australia's first woman deputy prime minister.

"King Kevin the new conqueror," said the Sun-Herald newspaper in Howard's home town of Sydney on Sunday. "It's Labor in a Ruddslide", said the national newspaper the Australian.

Up to six government ministers, including Howard, looked likely to be ejected in only the sixth change of government since World War Two. Labor is set to hold up to 86 seats in the 150-seat parliament.

Rudd is expected to forge closer ties with China and other Asian nations and has said he wants a more independent voice in foreign policy, with past Labor governments more supportive of an energetic United Nations and global organisations.

But he has also promised to maintain Australia's close alliance with the United States as the cornerstone of Australia's foreign and strategic policy.

"Rudd will have to open negotiations soon with the United States about the withdrawal of Australia's combat troops from Iraq. This is a delicate operation because it will be Labor's first testing of the alliance," veteran political commentator Michelle Grattan wrote in the Sun-Herald.

US President George W. Bush congratulated Rudd on his election victory, and praised Howard's leadership.

"The United States and Australia have long been strong partners and allies and the president looks forward to working with this new government to continue our historic relationship," the White House said in a statement.

Rudd promised to sign the Kyoto climate pact immediately and lead his country's delegation to next month's UN climate summit in Bali, which is expected to kick-start talks on a post-Kyoto deal to slash greenhouse gas emissions globally.

He also pledged unity at home, vowing to shut down controversial offshore detention of illegal immigrants and to take care of Aborigines in the wake of a conservative intervention to seize control of remote indigenous communities with troops and police.

"I will be a prime minister for all Australians, a prime minister for indigenous Australians, Australians who have been born here and Australians who have come here from afar," he said.

Family Minister Mal Brough, responsible for the Aboriginal intervention to stop rampant sexual abuse of children and "rivers of grog" in remote outback towns, was a high-profile casualty of the Labor win, losing his Queensland seat.

But Labor could be frustrated by a hostile upper house. The conservatives will have a Senate majority until July next year, possibly delaying Rudd's agenda and his promise to dump unpopular labour laws which supercharged his victory.

Centre-left Labor will have to negotiate with diverse minor Senate parties including the left-leaning Australian Greens and the conservative, Christian values Family First party.

The election was fought mainly on domestic issues, with Labor cashing in on anger at labour l