"Once again, Taiwan has demonstrated the strength and vitality of its democracy. I also congratulate Mr. Ma Ying-jeou on his victory," Bush said in a statement, calling Taiwan "a beacon of democracy to Asia and the world."

"It falls to Taiwan and Beijing to build the essential foundations for peace and stability by pursuing dialogue through all available means and refraining from unilateral steps that would alter the cross-Strait situation," he said.

"I believe the election provides a fresh opportunity for both sides to reach out and engage one another in peacefully resolving their differences," Bush said.

The U.S. leader said Washington would continue to maintain its close unofficial ties with the Asian island through the American Institute in Taiwan.

"The maintenance of peace and stability in the Taiwan Strait and the welfare of the people on Taiwan remain of profound importance to the United States," Bush said.

Ma, the opposition candidate of the Kuomintang (KMT) party, defeated ruling party chief Frank Hsieh in a landslide Saturday.

The soft-spoken, Harvard-educated politician has promised to work for closer ties with China, including a peace treaty to put an end to decades of hostilities, and to revive Taiwan's own stuttering economy.

The vote was closely watched by Beijing and Washington for signs of a new approach in the flashpoint region after eight years of recurring tensions under outgoing President Chen Shui-bian.

The U.S. State Department described the election as "free and fair."

"The people on Taiwan should be proud of this milestone in their democracy," department spokesman Sean McCormack said in a statement.

"We look forward to working with Taiwan's new leaders to ensure that the vibrancy in our economic and people-to people relationship is maintained."

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