June 25 (Bloomberg) -- The Muslim Brotherhood’s Mohamed Mursi vowed he would be a president for all Egyptians and honor the country’s international treaties as he inherited an office whose powers were curtailed by the ruling military council.

In his first televised address after becoming the first democratically elected president in Egypt’s history, Mursi called for national unity and pledged to heal rifts that had deepened in the 16 months since the ouster of Hosni Mubarak, who had ruled for almost 30 years. He saluted the people killed during last year’s uprising and their families and also paid tribute to the armed forces, whose leaders currently lead the government.

“Egypt, the nation and the people, is in need for a unity of ranks and word so that this great and patient people could reap the fruits of its sacrifices,” Mursi said. Relations with other countries would be based on mutual respect, he said, in comments aimed at allaying worries about the fate of the peace deal signed in 1979 between Egypt and Israel.

Millions took to the streets overnight to celebrate Mursi’s narrow win over Ahmed Shafik, the last premier of Mubarak’s regime. As well as marking a milestone in Egypt’s transition to democracy, the result may also quell tensions that grew after both men claimed victory in the runoff voting, which ended June 17.

Mursi had 51.7 percent of the votes to Shafik’s roughly 48.3 percent, election commission head Farouk Sultan told reporters yesterday.

Shafik congratulated Mursi on his victory, the state-run Middle East News Agency reported.

Equal Rights

“I will exert all effort to fulfill all the commitments and vows that I have taken before all of you,” Mursi said. “Egypt is for all Egyptians. We are all equal in rights, and we all have duties.”

The 60-year-old U.S.-trained engineer faces the challenge of uniting a country that has endured 16 months of unrest, during which economic growth slumped and Egypt’s credit default risk surged to its highest level since December 2008. The country has run through more than half of its international reserves while a $3.2 billion International Monetary Fund loan sought since January has been postponed.

Mursi’s victory will clear the path for Egypt to secure the IMF loan, said former Finance Minister Samir Radwan, who requested the aid last year before being vetoed by the military.

“He must go to the IMF,” Radwan said by phone. “It’s not the $3.2 billion that will help, it’s peanuts. The IMF comes to look at your policies and make sure they are in the right place. Even the Gulf states will not give you money before he signs with the IMF.”

Change of Fortunes

Mursi’s win marks a change of fortunes for the Brotherhood, which endured repeated crackdowns under Mubarak and his predecessors. Since its party won the largest bloc in parliament this year, the group has been locked in a power struggle with the ruling military council that took over after Mubarak was deposed in February 2011.

Before the presidential election, the ruling council boosted its authority at the expense of the presidency after a court ordered the dissolution of the Islamist-dominated parliament. Decrees granted the military legislative powers and the ability to play a direct role in shaping a new constitution. The military said that its moves were in the interests of national security and that it plans to hand over power by the end of June.

“The Egyptian people want a real president and not a figurehead,” a spokesman for the Brotherhood, Mahmoud Ghozlan, said by phone after the election results were announced. “The Egyptian people and the Muslim Brotherhood are keen on restoring the president’s authorities and thus are out there on the streets for the decree to be canceled.”

‘Stronger Presidency’

“The Brotherhood wants to have a stronger presidency, and they are going to use their popular mandate and their democratic legitimacy now to aggressively push against” the ruling generals, Shadi Hamid, director of research at the Brookings Doha Center in Qatar, said by phone. “That’s a key struggle to watch.”

The presidential election has polarized public opinion in Egypt, said Teymour El-Derini, Cairo-based director of Middle East and North Africa sales trading at Naeem Brokerage. “A lot of people will be happy, a lot of people will be upset and a lot of people are afraid,” he said. “The country is split into two, that’s the bigger issue. The new president has to make everyone happy. There won’t be much patience.”

Mursi’s win makes Egypt the latest Arab nation to see Islamists rise to power following a wave of popular uprisings that began in late 2010.

‘Powerful Symbolism’

“This has powerful symbolism for the broader region, and you can bet that Islamist parties across the Arab world are watching this very closely and they’re going to be further emboldened,” said Hamid.

The results may help allay fears of an outbreak of violence, which had been feared if Shafik had been proclaimed the winner. The former career air force officer was seen by Islamists and youth revolutionary groups as seeking to revive the regime -- a claim he denied.

“Mursi’s win is the triumph of the Jan. 25 revolution, and the coming days will see a reawakening for all Egyptians,” said Mohamed Mahmoud, a 32-year-old engineer who was among the hundreds of thousands in Tahrir Square celebrating the results. “This will restore the security of the country and the faith of Egyptians. There’s no going back now.”

Mursi had sought to broaden his support in the run-up to the election, winning the backing of some of the youth groups that had played a key role in the uprising. The alliance was based more on mutual opposition to Shafik than a convergence of political ideologies -- meaning that, as president, Mursi must continue to reassure them that his vision for Egypt is an all- encompassing one, not just one that lays the foundations for an Islamic state that secularists have worried will be imposed.

Israel, which has expressed concerns about a president drawn from the ranks of the Brotherhood, said it looked “forward to continuing cooperation with the Egyptian government on the basis of the peace treaty between the two countries,” according to a statement released by the prime minister’s office.

In an interview with Iran’s state-run Fars news agency, hours before he was announced as winner, Mursi said he will seek to improve relations with Iran to “create a strategic balance” in the region. The Iranian Foreign Ministry issued a statement last night to congratulate him for helping to realize the revolution’s “lofty goals.”

The White House in an e-mailed statement congratulated Mursi on his victory and called on him “to advance national unity by reaching out to all parties and constituencies in consultations about the formation of a new government.”

--With assistance from Alaa Shahine and Ladane Nasseri in Dubai and Ahmed A. Namatalla and Ola Galal in Cairo. Editors: Digby Lidstone, Andrew J. Barden