World leaders urged US President Barack Obama to seize upon the surprise award of the Nobel Peace Prize on Friday to step up diplomatic efforts to forge peace in the globe's troublespots. Leaders of major powers and former Nobel winners said they hoped the honour would spur peaceful dialogue and efforts to rid the world of nuclear arms. German Chancellor Angela Merkel said it was an 'incentive to the president and to us all' to do more for peace, adding that 'his engagement for a world free of nuclear weapons is a goal that we must all try to achieve in the coming years.' 'In a short time,' she said, 'he has been able to set a new tone throughout the world and to create a readiness for dialogue.' French President Nicolas Sarkozy said the prize marked 'America's return to the hearts of the world's peoples,' while former UN chief Kofi Annan called it 'an unexpected but inspired choice.' The stunning announcement by the Norwegian Nobel Peace Prize Committee was interpreted as a bid to encourage Obama's bold diplomatic overtures to arch foes, rather than recognition of any achievement by a young leader who has been in office for only nine months. 'We do not yet have peace in the Middle East... this time it was very clear that they wanted to encourage Obama to move on these issues...' said the 2008 winner, former Finnish president Martti Ahtisaari. Palestinian leader Mahmud Abbas said he hoped it would help bring about an independent Palestinian state, but the Islamist movement Hamas, which controls the Gaza Strip, said the US leader did not deserve the award. 'He did not do anything for the Palestinians except make promises,' Hamas spokesman Samir Abu Zuhri said. 'At the same time, he is giving his absolute support for the (Israeli) occupation.' Israeli President Shimon Peres however said Obama had restored hope to the world, adding, 'You gave us a licence to dream and act in a noble direction.' Prime Minister Benjamin Netanyahu said the award 'expresses the hope that your presidency will usher in a new era of peace and reconciliation.' In Afghanistan, where the United States is in the ninth year of a bloody conflict against Taliban extremists, President Hamid Karzai said Obama was being recognised for 'his hard work and new vision on global relations, his will and efforts for creating friendly and good relations at global level.' But the decision was condemned by the Taliban who said he had 'not taken a single step towards peace in Afghanistan.' Arch foe Iran said the award would provide Obama with an 'incentive to walk in the path of bringing justice to the world order.' 'We are not upset, and we hope that by receiving this prize he will start taking practical steps to remove injustice in the world,' said a spokesman for President Mahmoud Ahmadinejad. The Vatican welcomed the announcement 'in light of the president's demonstrated commitment in favour of promoting peace on an international level, and in particular, just recently, in favour of nuclear disarmament.' Thorbjoern Jagland, chairman of the Nobel committee, said its decision had been unanimous and was for Obama's 'extraordinary efforts' to strengthen diplomacy and cooperation. But the 1983 laureate, Poland's Lech Walesa, was incredulous. 'Who, Obama? So fast? Too fast -- he hasn't had the time to do anything yet,' he said. UN nuclear watchdog chief Mohamed ElBaradei -- another former winner -- thought Obama had 'reached out across divides and made clear that he sees the world as one human family, regardless of religion, race or ethnicity.' Japanese Prime Minister Yukio Hatoyama said he saw 'the world changing' since Obama entered the White House on January 20. 'I am really pleased. I want to congratulate him from my heart,' Hatoyama said, recalling an Obama speech calling for a nuclear-free world. Japan is the only country to have suffered a nuclear attack. South African archbishop Desmond Tutu, who won the prize in 1984, saw Obama as a younger incarnation of Nelson Mandela, a co-laureate in 1993. 'It is a very imaginative and somewhat surprising choice. It is wonderful,' he said in Cape Town. The Nelson Mandela Foundation said it hoped the award would steel Obama to promote peace and fight poverty. Obama's Kenyan relatives said they were delighted. 'It is an honour to the family... we are very happy that one of us has been honoured. We congratulate Barack,' Said Obama, the president's step-brother, told selfnews. Obama's father was Kenyan and he is regarded as a favourite son of the east African country. 