Bremer has the pleasure of relating the news

The announcement: Ambassador brings the house down when telling of the capture. Jack Fairweather was there.

The announcement: Ambassador brings the house down when telling of the capture. Jack Fairweather was there.

When Ambassador Paul Bremer entered the conference hall to a round of applause, people had already guessed what was coming. But Bremer's words - "Ladies and Gentleman. We've got him" - nonetheless brought the house down. He stood before the room, packed with Iraqi and Western media and civilian administrators, flanked by the senior commander of Coalition forces in Iraq, General Sanchez, and Iraqi governing Council president Adnan Pachachi.

Roars rose up from Iraqi journalists, US officials, and a phalanx of soldiers, who had come to witness a moment of history. One Iraqi journalist began shouting "Long live Iraq, death to Saddam." Several Iraqis wept silently as the Bremer continued.

"For decades hundreds of thousands have suffered at the hands of this cruel man. For decades Saddam Hussein divided citizens against each other. For decades he threatened and attacked their neighbours. Those days are over forever."

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Saddam's arrest will come as a personal victory for the man President Bush hand-picked to turn around the fortunes of the country. Iraq was teetering on the brink of chaos when Bremer, a former head of US State Department's counter-terrorism office, moved into the confines of Saddam's press conference.

Although the security situation has deteriorated, the progress that has been made in rebuilding Iraq's infrastructure is seen as being a result of his leadership.

"Now it is it time to look to the future, to your future of hope, to the future of reconciliation. Iraq's future has never been more full of hope," Bremer said. Bremer showed little emotion and was keen to hand the centre of attention to his Iraqi counterpart, Adnan Pachachi.

But there was little disguising his happiness when he described not getting a wink of sleep all night. Privately, the thought that he had finally caught the man he has accused of being at the centre of anti-coalition attacks had made Bremer "as pleased as punch", according to one Coalition Provisional Authority official.

One journalist asked what was the progression of phone calls made after he heard the news of Saddam's arrest. Bremer smiled wryly. "The minute-by-minute account will have to come out at a later date." There were jokes among the press corps of a summer best-seller.

"This is the first good news he had to announce since he's got here," said another official. "He deserves it."

As General Sanchez stepped forward to describe the details of the operation and a video put up on giant screens in the auditorium relayed images of Saddam's hideout, the ambassador stepped demurely backwards.

The moment of theatre had already passed, although pictures of the unkempt-looking Saddam still raised gasps from the auditorium.

There was time left for a few final questions. Does this mean we can all go home now, asked the Italian journalist.

There were smiles all around from the triumvirate. "Not to my knowledge," said General Sanchez with a nod and a grin from Bremer.

On the streets of the city, the first rumours of capture were greeted by a volley of speculative gunfire at lunchtime. The confirmation brought a moment of shocked silence as the face of the dictator flashed on television screens in electronics stores where many had gathered.

"I don't believe it," shouted Khalid Mahmud, at one store as the news broke, but his brother was already dashing outside with an AK47 to fire jubilant rounds in the air.

As evening fell the party had moved out onto the street. The electricity was out, but for once no one seemed to care now the news was released. Wasam Adain, 23, a music shop owner was just shutting up shop to find members of his band. "Thank you Bush. I shall be playing my trumpet until the dawn," he said. A band began knocking out a beat on an empty jerry can.

On Baghdad's main commercial street another band had already begun playing: tribal drums and wailing horn.

"Saddam has gone the way of other tyrants," the revellers sang, as they apparently made up the verses on the spot.

American soldiers also celebrated. Helicopters buzzed overhead, while soldiers 'high-fived' on the ground. "This is what I would call a morale booster," said one American soldier.