Blair shuffles Cabinet after historic victory
British prime minister acknowledges Iraq war was 'divisive'
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 Blair wins election, but voters deliver a verdict on the war in Iraq.
 British Prime Minister Tony Blair celebrates victory on Friday.
 British Conservative Leader Michael Howard thanks everyone in his re-election.
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LONDON, England (CNN) -- Tony Blair, elected to a historic third term as Britain's prime minister, announced his Cabinet changes after acknowledging that the Iraq war was "a deeply divisive issue" that hurt his Labour Party.
Speaking Friday after returning from Buckingham Palace, where Queen Elizabeth II confirmed his election victory, he said Britons were ready to "move on" and focus on the future.
He announced leadership changes in the Defense and Health ministries, and in the House of Commons. (Cabinet list)
Blair named Geoff Hoon as leader of the House of Commons. John Reid is his new Defense secretary, and Patricia Hewitt left her post as Trade secretary to become the new Health secretary.
Treasury chief Gordon Brown, who is said to be Blair's likely successor, stays on as chancellor of the Exchequer, and Jack Straw held onto his post as Foreign secretary.
Blair weathered a backlash from voters, but Labour's majority in the House of Commons has been slashed from 161 seats to about 60.
"I know that Iraq has been a deeply divisive issue in this country. But I also know and believe that after this election people want to move on, they want to focus on the future -- in Iraq and here," Blair said outside his Downing Street office.
"I have listened and I have learned," Blair said. "And I think I have a very clear idea of what the British people now expect from this government for a third term."
President Bush, who left Friday for a five-day, four-country tour of Central and Eastern Europe, called Blair from Air Force One to congratulate him on his re-election, White House spokeswoman Corry Schiermeyer said. (World reaction)
Labour needed at least 324 seats to form a majority in the 646-seat House of Commons.
With 626 seats reporting, Labour had 355 seats, the main opposition Conservatives had 197, Liberal Democrats had 62, and independents and smaller parties had 12.
Opposition Conservative Party leader Michael Howard said Friday that he planned to step down after the party suffered its third consecutive defeat at the hands of the Labour Party.
"I did not achieve what I set out to achieve," he told supporters.
Howard said he would stay on until the party decided when and how to elect a new leader. (Full story)
In one of the biggest upsets of the vote, a radical left-winger stormed to victory in a Muslim-dominated district of East London.
George Galloway, who was expelled from Blair's Labour Party, used his victory speech to launch a withering attack on the prime minister.
"All the people you killed, all the lies you told, have come back to haunt you," he said. "The best thing the Labour Party could do is sack you tomorrow morning," he said to cheers from the audience. (Full story)
Analysts say the slip in Labour's lead could loosen Blair's grip on power and prompt calls for him to step down before he has served a full five-year term. (Blair's secret weapon)
Nevertheless, it was a historic victory for Blair and his party -- the first time a Labour government has won three straight elections.
"I think we can be really proud of what we've achieved," said Blair, who was greeted with cheers and applause by party staff and supporters when he arrived back in London. "We've got a mandate to govern this country again," added Blair, who celebrates his 52nd birthday Friday.
Turnout figures showed that only about 61 percent of people eligible to vote went to the polls -- a 2 percent rise over the last general election.
CNN European Political Editor Robin Oakley said that there clearly was an "Iraq factor" in the results.
It appeared the voters had accepted Conservative leader Howard's invitation to "wipe the smirk off Tony Blair's face," he said.
Oakley said a Labour majority that falls to 64 seats, as some are predicting, would be "a danger area" for Blair, who has about 50 left-wing rebels in his party who might vote against his programs in Parliament.
Brown was widely credited for the strong economy that helped seal the Labour victory, outweighing the bitterness many voters said they felt over Iraq.
Brown called the Labour victory "historic."
"This is the work that drives us on. This is the vision that gives enduring purpose to what we do. This is the task our party wants to take forward starting from this morning," Brown said after winning a seat in his constituency.
Former Prime Minister Margaret Thatcher, a Conservative and the last prime minister to serve three terms, said of Blair: "I'm not quite sure of his place in history. History will determine that."
French President Jacques Chirac was among world leaders sending their congratulations to Blair.
"I wish you every success in the pursuit of your important mission," he said.
German Chancellor Gerhard Schroeder said: "I heartily congratulate you for your birthday and third straight election victory. I believe you've given yourself the greatest birthday present there is with your victory." (More reaction)
Other developments:
Northern Irish Nobel laureate David Trimble lost his seat in Parliament as his Ulster Unionist party, seen as one of the architects of the landmark Good Friday peace deal, was drubbed at the polls by hardline rivals. (Full story)The fox-hunting son of rock star Bryan Ferry was arrested Friday when he lunged at Blair. Otis Ferry, 22, reached over a barrier and shouted at the prime minister as he arrived for a post-election party at London's National Portrait Gallery. "I've had enough of this government," he said as he was bundled away by police.Former TV personality Robert Kilroy-Silk, standing for his new anti-EU Veritas party in Erewash, came in fourth place, almost 20,000 votes behind Labour's Liz Blackman. He said he had never really expected to win the seat, but wanted to offer the public "some honesty" in politics. The Green party, hoping to win its first Westminster seat in Brighton Pavilion, came third but won 9,530 votes, or 22 percent, the party's best-ever result. Candidate Keith Taylor heralded it as "a fantastic" result in the face of a "grossly unfair electoral system."
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Associated Press contributed to this report.
