Moving day in London

LONDON (AP) - David Cameron, the youthful leader who modernized the party of right-wing icon Margaret Thatcher, became prime minister Tuesday after the resignation of Gordon Brown - capping a gripping election saga that returns the Tories to government after 13 years of Labour Party rule.

Following tradition, Queen Elizabeth II appointed Cameron at Buckingham Palace - a stately denouement to a behind-the-scenes dogfight between Cameron and Brown for the cooperation of Britain's third-place party, after an election that left no party with a majority.

Within minutes, the 43-year-old Cameron was installed at No. 10 Downing Street, becoming the youngest prime minister in almost 200 years, since Lord Liverpool took office at age 42.

An announcement followed that Liberal Democrat leader Nick Clegg would become deputy prime minister - a rarely awarded and prestigious post - after days of hard bargaining with his former political rivals. Four other Liberal Democrats also received Cabinet posts.

Cameron and Clegg agreed to form a coalition after Cameron's Conservative Party won the most seats in Britain's May 6 national election, but fell short of winning a majority of seats in Parliament. The agreement, reached over five sometimes tense days of negotiation, delivered Britain's first full coalition government since World War II.

"Nick Clegg and I are both political leaders who want to put aside party differences and work hard for the common good and for the national interest," Cameron said.

President Barack Obama telephoned to congratulate Cameron, and invited him to visit Washington this summer, according to the White House. Obama told Cameron that he looked forward to meeting at an international economic summit to be held in Canada next month.

Britain's new government could spell changing relationships with its foreign allies.

Both Cameron and Clegg have signaled they favor looser ties to Washington than those held by Brown and his predecessor, Tony Blair. Cameron and Clegg back the Afghanistan mission but Cameron hopes to withdraw British troops within five years. Clegg has said he's uneasy at a rising death toll.

Relations with European neighbors could also become problematic. Cameron's party is deeply skeptical over cooperation in Europe, and has withdrawn from an alliance with the parties of Germany's Angela Merkel and France's Nicolas Sarkozy. Clegg, once a member of the European parliament, has long been pro-European.

The coalition has already agreed on a five-year, fixed-term Parliament - the first time Britain has had the date of its next election decided in advance.

Both parties have made compromises, and Cameron has promised Clegg a referendum on his key issue: Reform of Britain's electoral system, aimed at creating a more proportional system.

"We are going to form a new government - more importantly, we are going to form a new kind of government," Clegg said in a news conference after his party's lawmakers overwhelmingly approved his decision to enter a coalition with Cameron.

Their priority will be to spur a once high-flying economy, rooted in world-leading financial services, that has run into hard times. At least 1.3 million people have been laid off and tens of thousands have lost their homes in a crushing recession. Cameron has pledged an emergency budget within 50 days.

Arriving at London's Downing Street hand-in-hand with his wife, Samantha, Cameron said he believed that Britain's "best days lie ahead."

"We have some deep and pressing problems - a huge deficit, deep social problems, a political system in need of reform," Cameron said. "For those reasons, I aim to form a proper and full coalition between the Conservatives and the Liberal Democrats."

Cameron, who became Conservative leader in 2005, has overhauled his group - which a senior colleague once acknowledged had earned its nickname "the nasty party." He took up a green agenda, softened the tone of policy on immigration and promoted more female and ethnic minority candidates.