But U.S. officials, struggling to defeat an insurgency that has sown mayhem in Iraq with car bombs, beheadings and kidnappings in the three years since the U.S. invasion, have warned against expectations of an quick end to violence.

Hours after U.S. and Iraqi officials announced the death of Zarqawi, a string of bombs in Baghdad on Thursday killed at least 31 people and wounded scores.

Iraqi Oil Minister Hussain al-Shahristani said the demise of Zarqawi would help improve oil production, crippled by violence.

But gunmen kidnapped a senior official of the oil ministry on Thursday. Police and ministry sources said Muthana al-Badri, Director General of Iraq's State Company for Oil Projects, had been on his way home when gunmen stopped his car.

While warning of "tough days ahead," Bush said the air strike "delivered justice to the most wanted terrorist in Iraq."

U.S. military officials said the Jordanian-born Zarqawi was killed in a joint U.S.-Iraqi operation.

"TIPPING POINT"

Shi'ite Prime Minister Nuri al-Maliki, in an opinion piece in Britain's Times newspaper, said his three-week-old national unity government would build on the momentum to rein in violence.

Dozens of bodies are found dumped in Baghdad each day, many showing signs of torture, and tens of thousands of people have fled their homes out of fear.

Maliki said Iraq "will soon reach a tipping point in our battle against the terrorists" as Iraqi troops take over responsibility from Americans.

News of Zarqawi's death coincided with a political breakthrough as parliament approved Maliki's candidates for defense and interior ministers after long wrangling among his coalition government partners.

Allies of al Qaeda like Mullah Omar were defiant.

"I give good news to Muslims around the world, the resistance against the crusader forces in Afghanistan and other parts of the Islamic world will not be weakened," the Afghan Islamic Press news agency quoted him as saying.

The agency did not say how it had obtained the statement from Omar who, like al Qaeda leader Osama bin Laden, is believed to be hiding somewhere along the rugged Afghan-Pakistani border.

Analysts said any hope Zarqawi's death will take the sting out of Iraq's insurgency may prove premature because al Qaeda militants are only one of several groups fighting the U.S.-backed, Shi'ite-led government.

"The insurgency will continue strongly because it was never dependent on Zarqawi for its inspiration or leadership," said Joost Hiltermann at the Brussels-based International Crisis Group think tank.

The U.S. military released pictures of the corpse of the bearded Zarqawi with facial abrasions and eyes closed. The air strike was carried out by two F-16 warplanes.

U.S. Major General William Caldwell said an Egyptian militant trained in Afghanistan called Abu al-Masari, who established the first al Qaeda cell in Baghdad, may succeed Zarqawi as head of the group in Iraq.