The US said Saddam Hussein offered no resistance

"Ladies and gentlemen, we got him," US administrator Paul Bremer told journalists in Baghdad, to loud cheers from Iraqis in the audience.

The former leader was found hiding in a cellar at a farmhouse about 15km (10 miles) south of his hometown Tikrit.

British Prime Minister Tony Blair has welcomed the news, saying it "removes the shadow" hanging over Iraq.

Saddam Hussein, 66, is the most wanted man on the list issued by US authorities but has not been seen since Baghdad fell to US forces in April.

We got him Paul Bremer US chief administrator in Iraq Statement in full Watch the statement

Video footage apparently showing a dishevelled-looking Saddam with a long black beard in custody receiving a medical check up was shown at the press conference.

Saddam Hussein was found following intelligence indicating he was at one of two possible locations south of Tikrit, Lieutenant General Ricardo Sanchez, commander of coalition ground forces in Iraq, said.

Colonel Sanchez then described the sequence of events:

• US forces head to the area and conduct intensive searches in Al-Dawr

• US forces find "rural farmhouse"

• "Spider hole" or cellar camouflaged with bricks and dirt and about six to eight feet (1.8m to 2.5m) deep located in farmhouse

• Saddam Hussein found inside and arrested at 2030 local time (1730GMT) on Saturday - US says he offers no resistance

• Two unidentified people said to be "close allies" of Saddam Hussein arrested and weapons and more than $750,000 cash confiscated.

Intensive search

Iraqi Governing Council head Abdel-Aziz al-Hakim was quoted as saying that a DNA test had proved the man in custody was Saddam Hussein.

Saddam Hussein was shown in video filmed just after his arrest

Meanwhile, violence continued in Iraq, with at least 17 people killed and 30 wounded after a powerful car bomb exploded at an Iraqi police station in Khaldiyah, about 35 miles (60 km) west of Baghdad.

US officials say it may have been a suicide attack.

Saddam Hussein had been the object of intensive searches by US-led forces in Iraq but previous attempts to locate him had proved unsuccessful.

People have started celebrating the capture of their former president in the streets of Baghdad and the northern Iraqi city of Kirkuk by sounding their horns and firing into the air.

The former Iraqi leader was last seen in television footage shot in April at a Baghdad market just before the city fell to US forces in the recent Iraq conflict.

US authorities had offered a $25m reward for information leading to his capture.

On 22 July his sons, Uday and Qusay, were killed in a raid by US forces in the northern city of Mosul.

In October, US officials said they had intelligence indicating Saddam Hussein was hiding in Tikrit.

They said he seemed to be moving around various safe houses with the aid of family members, often in disguise.

Saddam Hussein was born in Tikrit and has a tight network of family and clan ties which permeated all of the regime's main military, security and political institutions while he was in power.