BEIRUT — Lebanon's Western-backed coalition defeated Hezbollah and its allies, according to official results Monday that dealt a stunning setback to the Iranian-backed militants and set the stage for renewed political deadlock in the volatile nation.

The winners celebrated in the streets, setting off fireworks and driving around in motorcades honking hours before the official results from Sunday's parliamentary vote were even announced.

The election was the first major political test in the Middle East since President Barack Obama called last week for a "new beginning between the United States and Muslims." In his speech from Cairo, he challenged the Islamic world to confront violent extremism and urged Israel, the Palestinians and Arab states to find common ground to establish peace.

Hezbollah, which the U.S. considers a terrorist organization, has been one of the staunchest opponents of American policy in the Middle East. A win for the Shiite group would have boosted the influence of its backers Iran and Syria and risked pushing one of the region's most unsettled countries into international isolation and possibly more conflict with Israel.

"We are on the threshold of a new stage," Prime Minister Fuad Saniora told reporters after his coalition's victory. "We should try and understand the changes that are coming to our country and the region and to be prepared."

Hezbollah's defeat helped ease apprehension in the region as the Obama administration prepares to dive deeper into Mideast peacemaking, sending envoy George Mitchell to the region in coming days.

The U.S. president congratulated the Lebanese people for a peaceful national election held with "courage" and a "commitment to democracy."

"Once more, the people of Lebanon have demonstrated to the world their courage and the strength of their commitment to democracy," the Obama statement said, without reference to Hezbollah.

Paul Salem, Beirut-based director of the Carnegie Middle East Center, an arm of the Washington-based Carnegie Endowment for International Peace, said the overall result of the elections is reassuring for the West.

"Certainly it goes in a positive direction in the sense that it doesn't shake the boat. It reassures the Arab countries, Europe, and the U.S. that there will be no dramatic change of policy," he said. "It reinforces a kind of reasonable rather than a radical situation in the region."

Salem said Obama's outreach may have helped the winning side in the sense that it is no longer seen as a liability in many corners of the Middle East to be aligned with the U.S.

But Obama's outreach did not appear to have resonated with the electorate as much as a last-minute appeal from head of the influential Maronite Catholic Church. Cardinal Nasrallah Sfeir warned voters on the eve of the election of what he called an attempt to change Lebanon's character and its Arab identity, a clear reference to Hezbollah and its Persian backer, Iran.

The interior minister announced the final results for the 128 parliamentary seats from all 26 districts at a news conference. The tally showed the winning coalition with 68 seats versus 57 for the Hezbollah-led alliance. Three seats went to independents. The allocation was largely unchanged from the outgoing legislature, ensuring that the same disputes will continue to roil the political scene.

Israel, which warned ahead of the elections that a Hezbollah victory could further destabilize the Middle East, welcomed the victory. Officials said they hope that the political clout of Hezbollah had been blunted, though there seemed to be some fear the group might try to stir up trouble on the border in the wake of its defeat.

"There was an election in Lebanon and the moderate camp won. This is definitely a positive sign," Defense Minister Ehud Barak said. "But the real proof will be in the pudding and mainly in the government's ability to enforce order and prevent Hezbollah from continuing military actions in southern Lebanon and throughout Lebanon."

Hezbollah was boosted by its 2006 war against Israel and along with its allies, it provoked a political crisis in 2007-2008 with demands for veto power over government decisions.

They staged protests and installed an encampment in downtown Beirut that paralyzed the commercial heart of the Lebanese capital. The showdown culminated in street battles that brought the country to the edge of another civil war.

An agreement to end the violent confrontation gave Hezbollah veto power over major government decisions.

This time around, the pro-Western coalition vowed not to give Hezbollah and its allies a blocking minority in the new government if they won, maintaining that the arrangement paralyzed decision-making. Hezbollah and its allies have countered that sharing power ensured peace.

A failure by the parties to agree on how to share power could set the stage for another round of confrontation that could again inflame sectarian tensions.

The leader of the largest bloc in the pro-Western coalition, Saad Hariri, said he extends his hand to the losing side to work together.

President Michel Suleiman set the political tone for the postelection period when he expressed hope for a national unity government, a prospect both sides have already raised.

Turnout nationwide was about 52.3 percent up from 45.8 percent in 2005.