Democrats wrested control of the Senate from Republicans with an upset victory in Virginia, giving the party complete domination of Capitol Hill for the first time since 1994, The Associated Press reported.

Jim Webb's squeaker win over incumbent Senator George Allen gave Democrats their 51st seat in the 100-seat Senate, an astonishing turnabout at the hands of voters unhappy with Republican scandal and unabated violence in Iraq. Allen was the sixth Republican incumbent senator defeated in Tuesday's elections.

The Senate had teetered at 50 Democrats, 49 Republicans for most of Wednesday, with Virginia hanging in the balance. Webb's victory ended Republican hopes of eking out a 50-50 split, with Vice President Dick Cheney wielding tie-breaking authority.

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Earlier Wednesday, President George W. Bush congratulated Democrats on their takover of the House of Representatives and strong gains in the Senate, as he announced he had selected a new defense secretary to oversee the increasingly violent conflict in Iraq.

Bush, reaching into the administration of his father, said that former CIA Director Robert Gates would replace Donald H. Rumsfeld as defense secretary.

"I recognize that many Americans voted last night to register their displeasure with the lack of progress being made" in Iraq, the president said. "Yet I also believe most Americans - and leaders here in Washington from both political parties - understand we cannot accept defeat."

Gates led the CIA, under then-President George H.W. Bush, from November 1991 to January 1993.

"Bob Gates will bring a fresh perspective and great managerial experience," Bush said.

Bush was asked whether, now that he is replacing Rumsfeld at the Pentagon, he still had full confidence in Dick Cheney and whether the vice president would serve out the rest of his term.

"Yes he does, yes he will," Bush replied.

Like Rumsfeld, to many critics Cheney has been the face of the war in Iraq and one of its chief advocates.

Bush expressed both disappointment and surprise over the election results and said he had called Democratic leaders to personally congratulate them.

"Actually, I thought we were going to do fine yesterday," Bush said. "Shows what I know."

He quipped that he had given House Minority Leader Nancy Pelosi the name of a Republican interior decorator to help her pick out drapes for her new meeting room - poking fun at the California Democrat's pre-election remark about having her pick of Capitol suites.

As to the role played in Tuesday's widespread Republican losses, Bush said, "I believe Iraq had a lot to do with the election, but I think there were other factors as well." He suggested that a variety of congressional scandals may also have played a role.

He said he would seek to find "common ground" with Pelosi, but without either of them compromising their principles. She will become the first-ever woman to be speaker of the House.

Asked whether his announcement signalled a new direction in the war that has claimed the lives of more than 2,800 U.S. troops and thousands of Iraqis, Bush said, "Well, there's certainly going to be new leadership at the Pentagon."

Bush lavished praise on Rumsfeld, who has spent six stormy years at the Pentagon. He disclosed he met with Gates last Sunday, two days before elections in which Democrats swept to control of the House of Representatives and possibly the Senate.

Last week, as he campaigned to save the Republican majority, Bush declared that Rumsfeld would remain at the Pentagon through the end of his term.

Rumsfeld, 74, was in his second tour of duty as defense chief. He first held the job a generation ago, when he was appointed by President Ford.

Gates is the president of Texas A&M University and a close friend of the Bush family. He served as director of the Central Intelligence for Bush's father from 1991 until 1993.

Gates first joined the CIA in 1966 and served in the intelligence community for more than a quarter century, under six presidents.

His nomination must be confirmed by the Senate.

Whatever confidence Bush retained in Rumsfeld, the Cabinet officer's support in Congress had eroded significantly. Rep. Nancy Pelosi, the House speaker-in-waiting, said at her first post-election news conference that Bush should replace the top civilian leadership at the Pentagon.

And Senate Majority Leader Bill Frist, who had intervened in the past to shore up Rumsfeld, issued a statement saying, "Washington must now work together in a bipartisan way - Republicans and Democrats - to outline the path to success in Iraq."

Democrats win U.S. House, threaten to take Senate
Democrats swept Republicans from power in the United States House of Representatives and moved to the brink of control in the Senate, where they led in two tight races.

Winning these two races would grant Democrats control of all of Congress.

Democrats gained about 30 seats in the House, according to network projections of Tuesday's vote, riding to victory on a wave of public discontent with the Iraq war, corruption and Republican President George W. Bush.

They also picked up four of the six Senate seats they needed for a majority, including a Virginia race where an expected recount and legal challenges could delay naming a winner and dredge up memories of the 2000 presidential election recount.

Democrats led in Montana and Virginia, where Democrat James Webb had a 11,000-vote advantage over Republican Senator George Allen out of more than 2 million cast.

The Virginia recount, which could stretch into December, raised the specter of weeks without a decision on Senate control.

The narrow governing majorities in Congress, especially the Senate, were almost certain to spawn more partisan gridlock and political warfare during Bush's final two years in the White House.

Democratic control of the House will make outspoken liberal Representative Nancy Pelosi the first female Speaker and could slam the brakes on much of Bush's agenda and increase pressure for a change of course in Iraq.

"Tonight is a great victory for the American people," Pelosi told a Democratic rally on Capitol Hill. "Today the American people voted for change, and they voted for Democrats to take our country in a new direction."

All 435 House seats, 33 Senate seats and 36 governorships were at stake in Tuesday's voting. Democrats beat Republican Senator Rick Santorum, the third-ranking Republican in the Senate and one of the Democrats' biggest targets this year.

Connecticut Senator Joseph Lieberman, running as an independent, beat Democratic anti-war challenger Ned Lamont, who had defeated the former vice presidential nominee in the Democratic primary.

Democratic Senator Hillary Rodham Clinton sailed to an easy re-election win in New York, setting up a likely 2008 presidential run.

"This is a wake-up call to the Republican Party," said Republican Senator John McCain of Arizona on CNN.

Democrats also scored big wins in governors' races, taking five seats from Republicans and nearing a national majority that could give them an edge in the 2008 presidential election.