Moderate cleric Hassan Rohani won Iran's presidential election on Saturday, the interior ministry said, scoring a surprising landslide victory over conservative hardliners without the need for a second round run-off.

The outcome will not soon transform Iran's long tense relations with the West, resolve an international crisis over its pursuit of nuclear power or lessen its support of Syria's president in the civil war there - matters of national security that remain the domain of Supreme Leader Ayatollah Ali Khamenei.

But the president runs the economy and wields important influence in decision-making. Rohani's resounding election mandate could provide latitude for a diplomatic thaw with the West and more social freedoms at home after eight years of belligerence and repression under President Mahmoud Ahmadinejad, who was legally barred from seeking a third consecutive term.

Celebratory crowds assembled near Rohani's headquarters in downtown Tehran a few hours before his victory was confirmed.

"Long live reform, long live Rohani," chanted the throngs, according to witnesses at the scene. "Ahmadi, bye bye," they added in reference to Ahmadinejad, another witness there said.

Others flashed the victory sign and chanted slogans in favour of Mirhossein Mousavi, who reformist supporters believe was robbed of the 2009 election by what they say was vote rigging to return Ahmadinejad to office.

"Mousavi, Mousavi, I got back your vote" and "Mousavi, Mousavi, congratulations on your victory," the crowds shouted.

"Many people are holding Rohani posters," said one witness in Tehran. "Some are hugging and crying. We are all so happy here. We can't believe there is finally a change."

Another eyewitness named Mina told Reuters tearfully by phone: "I haven't been this happy in four years. I feel that we finally managed to achieve a part of what we have been fighting for since the past elections. They finally respected our vote. This is a victory for reforms and all of us as reformists."

Rohani will take up the presidency, the highest elected office in Iran's hybrid clerical-republican system, in August.

Security forces crushed protests following the 2009 election - several people were killed, hundreds were detained. Mousavi and his fellow reformist candidate are still being held under house arrest. Authorities say the election was free and fair.

Iranian authorities and the candidates themselves, including Rohani, discouraged large street rallies this time round to forestall any possible flare-up of violent instability in the sprawling OPEC member state of 75 million people.

Though an establishment figure, Rohani is a former chief nuclear negotiator known for his nuanced, conciliatory approach. He has pledged to promote a policy of "constructive interaction with the world", but no surrender to Western demands for a nuclear suspension, and enact a domestic "civil rights charter".

Rohani could act as a bridge-builder between hardliners around Khamenei who reject any accommodation with the West and reformers marginalised for the last four years who argue that the Islamic Republic needs to be more pragmatic in its relations with the world and modernise at home in order to survive.

His wide margin of victory revealed a widespread reservoir of reform sentiment with many voters, undaunted by restrictions on candidate choice and campaign rallies, seizing the chance to rebuke the unelected power elite over Iran's economic miseries, international isolation and crackdowns on secular lifestyles.

In an apparent move to convey political continuity to both domestic and foreign audiences, Khamenei congratulated both the people of Iran for the high turnout in the polls and Rohani for his electoral success.

Rohani's nearest rival was conservative Tehran Mayor Mohammad Baqer Qalibaf, a long way behind with less than 16 percent. Other hardline candidates close to Khamenei, including current nuclear negotiator Saeed Jalili, scored even lower.

Iran's rial strengthened about 4 percent against the U.S. dollar on Saturday after partial vote tallies pointed to an easy Rohani victory, web sites tracking the currency said.

British former Foreign Secretary Jack Straw, who dealt with Rohani during nuclear negotiations between 2003 and 2005, called him a "very experienced diplomat and politician".

"What this huge vote of confidence in Doctor Rohani appears to show is a hunger by the Iranian people to break away from the arid and self-defeating approach of the past and for more constructive relations with the West," he said before Rohani's victory was declared.

"On a personal level I found him warm and engaging. He is a strong Iranian patriot and he was tough, but fair to deal with and always on top of his brief."

Suzanne Maloney, senior fellow at the Brookings Institution, speaking before the interior ministry announcement, said Iran "appears to be on the verge of shocking the world".

Rohani's campaign was endorsed by pragmatic former president Akbar Hashemi Rafsanjani after the latter was barred from running by a state vetting body - out of concern, analysts said, that he could prove too powerful a rival to Khamenei.

Rohani received another big lift when reformists led by ex-president Mohammad Khatami swung behind him after their own lacklustre candidate, Mohammad Reza Aref, withdrew to help consolidate the non-conservative vote.

In contrast, several high-profile conservatives with close ties to powerful clergy and Revolutionary Guards chiefs failed to unite behind a single candidate, suffering what appeared to be a decisive split in their support base as a result.

Rohani rose to international prominence as Iran's nuclear negotiator in talks with Britain, France and Germany from 2003 to 2005 that saw Iran agree to suspend nuclear fuel enrichment-related activities, tamping down Western pressure on Tehran.

He left the post when Ahmadinejad came to office in 2005. Tehran defiantly relaunched and expanded uranium enrichment, and there has been no substantive progress in intermittent negotiations with six world powers since then.

The upshot for the Islamic Republic has been a punishing expansion of United Nations, U.S. and European Union sanctions, badly damaging its heavily oil-dependent economy and triggering a rise in inflation and unemployment.-Reuters