In a moment of profound racial significance, Barack Hussein Obama took power as the first black US president on Tuesday and quickly turned the page on the Bush years, calling on Americans to confront together an economic crisis that he said was caused by “our collective failure to make hard choices.” Obama spoke just after noon to a sea of cheering people, appearing to number well over a million, who packed the National Mall from the Capitol to the Washington Monument and beyond. Four hours later, at the end of the parade route, he left his car and strolled with his wife along Pennsylvania Avenue on the final steps of a long march to the White House, holding hands and waving to cheering crowds. In his inaugural address, Obama pledged to seek a “new way forward” with the Muslim world after eight rocky years under his predecessor George W. Bush, but he also warned that the United States will defeat “terror.” Faced with a set of daunting challenges across the Muslim world – from the Palestinian territories to Iran, Iraq, Afghanistan and Pakistan – Obama set a new tone and promised a fresh balance in using diplomatic, military and other forms of power. Obama echoed campaign promises for two key Muslim nations by saying the United States will “begin to responsibly leave Iraq to its people, and forge a hard-earned peace in Afghanistan.” “Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America,” Obama said, pledging bold and swift action to bring new life to the US economy and declared to millions watching abroad that, “We are ready to lead once more.” Hundreds of thousands of people erupted in roars of approval on Washington's broad National Mall grounds as they watched Obama stand with one hand raised, one hand on a Bible used to swear in Abraham Lincoln in 1861, and repeat the brief oath to become the 44th U.S. president. With his wife, Michelle, holding the Bible, Obama, the 47-year-old son of a white mother from Kansas and a black father from Africa, was sworn in by Chief Justice John G. Roberts Jr.a few minutes after noon, a little later than planned, and spoke immediately afterward. In a jab at the unilateral military force that former President George W. Bush used to invade Iraq in 2003, Obama said previous American generations had defeated fascism and communism with “sturdy alliances and enduring convictions” besides resorting to armed intervention. These generations knew that US “security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint,” Obama said, alluding to the accusations of arrogance cast at the Bush administration. His administration will be guided by such principles as it meet “those new threats that demand .... even greater cooperation and understanding between nations,” Obama declared. In a clear reference to harsh US interrogation practices of terrorism suspects that have been widely condemned abroad, Obama vowed a change, saying he rejected as false “the choice between our safety and our ideals.” Former President Bill Clinton, making his way through the Capitol after the ceremony concluded, called the speech thoughtful, weighty and well-delivered. “It's obviously historic because President Obama is the first African American president, but it's more than that,” Clinton said. “This is a time when we're clearly making a new beginning. It's a country of repeated second chances and new beginnings.” In his speech, Mr. Obama acknowledged that some are skeptical of his ability to fulfill the hope that many have in his ability to move the nation in a new direction. “What the cynics fail to understand is that the ground has shifted beneath them — that the stale political arguments that have consumed us for so long no longer apply,” said Obama, who in his campaign emphasized a commitment to reduce partisanship. “The question we ask today is not whether our government is too big or too small, but whether it works — whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified.” After the speech, Obama escorted Bush to the East Front of the Capitol, where a helicopter was waiting to take the former president and his wife to Andrews Air Force Base outside Washington for a return trip to Texas. After seeing Bush off, Obama went back inside the Capitol to sign nomination papers for his cabinet choices and to attend a traditional luncheon in Statuary Hall, the original chamber of the House of Representatives. The inauguration of Obama, 47, the son of a black Kenyan father and a white mother from Kansas, was steeped in symbolism for African-Americans, who for generations suffered slavery and then racial segregation that made them second-class citizens. In a nod to that history, Obama lauded the people who built the country from its foundation, including those who “endured the lash of the whip and plowed the hard earth.” He was due to meet military commanders on Wednesday to discuss the possibility of accelerating the US troop withdrawal from Iraq, and the need for more forces in Afghanistan. Sources said Obama will move quickly to name a Middle East envoy and is strongly considering former Sen. George Mitchell for the job.