By Dominic Bailey BBC News Online, Madrid

In the midst of the flag-waving, chanting, rockets and horns, one of the Spanish Socialist faithful admitted: "After eight years, it's like a dream."

Aznar: Punished by voters as no Spanish leader has been

The last few days, from the 11 March bomb attacks in Madrid to the Socialists' defeat of the ruling Partido Popular at the elections, have indeed been like a dream.

The nightmare, the restlessness, the waiting for daylight and finally a new dawn.

But after a night of celebrations in Madrid for the socialist PSOE party, they wake to a city still grieving for the dead, still scarred by the terror.

PSOE leader Jose Luis Rodriguez Zapatero, who is known for his humility, asked for a minute's silence for the victims of the attacks as he addressed his jubilant supporters.

The youth above all has brought us back. They know what is best for them. They have said no to the war and no to terrorism and all Spanish people want peace Rafael Lopez Economist

The victory was much more than the party had hoped for.

Their principal aim was to ensure PP did not get an absolute majority. But in an unprecedented upset, they won.

Economist Rafael Lopez, 52, said victory had been hard work.

"The youth above all has brought us back. They know what is best for them. They have said no to the war and no to terrorism and all Spanish people want peace."

The mobilisation of protesters against the government's decision to join the US-led war in Iraq was repeated in demonstrations against terrorism and, on Saturday, against the government's handling of the Madrid bombing.

Spanish views on the shock election result In pictures

Turnout for the elections, for many a personal show of faith in democracy and their right to vote, was 77.2%, around 9% higher than in 2000.

Law student Miguel Perez, 20, said Spain had had enough of the PP's lies. "I really think this will start changes for the good," he said.

"I think we'll see social policies such as aid for the poor, better working conditions, and better living conditions as there are not enough homes. I think there will be a general change in internal and external policies."

It is long list for the new government which inherits a buoyant economy, built up over eight years after the country was left in disarray by the former Socialist government.

The left has emerged strong from these elections and PSOE is likely to find allies in the Catalan left (ERC) and the United Left (IU), whose leader said it had lost some seats for the greater good of defeating PP.

'Dirty campaign'

But Monday's ABC newspaper accused the left of a dirty campaign against the government.

Never in the history of our democracy has a party beaten the absolute majority of the opposition, never has a candidate achieved power at the first attempt El Mundo newspaper

"It seemed they would not talk about Eta or the alliances of power in Catalunya. Taboo. But the ban stopped when talking about Al-Qaeda and the chance to throw mud at the government of Aznar, an honoured and honourable man. It was open season against the right," it said.

El Mundo leads with the headline "Spain punishes PP and puts its faith in Zapatero".

"Never in the history of our democracy has a party beaten the absolute majority of the opposition, never has a candidate achieved power at the first attempt," it says.

"If it has happened this time around, without taking anything away from the Socialist leader, it has largely been down to the strong punishment vote towards Aznar's conduct in this legislature."

El Pais says turnout seemed to be the people's response to "attempts to destabilise the country by terrorists who chose to organise the Madrid killings on the eve of elections".

La Razon agrees that the attacks and the decision to join the war in Iraq had been a decisive factor.

As the election fog clears, Spaniards get back to a harsh reality.

There are still dozens of victims in a serious condition in the hospitals and some bodies are yet to be identified.

But as an initial sign of getting back to some form of normality, one of the railway lines targeted by the bombers opened on Monday.