Rio de Janeiro won a resounding vote on Friday to stage the first Olympics in South America in 2016, rebuffing U.S. President Barack Obama, who had personally lobbied for his adopted hometown Chicago.

The decision by the International Olympic Committee in Copenhagen sparked joyful samba dancing on Rio's Copacabana beach and shocked disbelief on the streets of Chicago, which had been considered the front-runner.

Rio's victory was heralded as signaling Brazil's arrival as a major economy by President Luiz Inacio Lula da Silva, who hugged soccer great Pele and broke down in tears of joy as he celebrated a momentous victory in which he played a key role.

For Obama, it marked the loss of a politically risky gamble to bring home the Olympics. Despite a speech to the IOC by Obama, Chicago was eliminated in the first round of voting, one of the biggest shocks in an Olympic ballot.

You can play a great game and still not win, Obama told reporters at the White House after returning from Europe.

Chicago had started as front-runners and most Olympic observers had expected the Obama factor -- first lady Michelle Obama spent two days lobbying in Copenhagen and also addressed the IOC session -- to be decisive.

The fourth candidate, Tokyo, was knocked out in the second ballot. In the final round of voting by IOC members, Rio picked up more than two thirds, winning by 66 votes to Madrid's 32.

The victory for Rio and Brazil, which will also host the World Cup in 2014, caps a resurgence in the South American giant's economic and diplomatic clout in recent years -- a transformation that played a key part in the bid's appeal.

'THE TIME HAS COME'

All those people who thought we had no ability to govern this country will now learn that we can host the Olympics, said Lula, a former union leader who became Brazil's first working-class president in 2003. ... The world has recognized that the time has come for Brazil.

Lula made an impassioned appeal to the IOC to stop its habit of awarding Olympics to Europe, North America and the Far East and give Brazil and South America a long-overdue chance.

Despite worries about Rio's high crime rate and lack of infrastructure, that appeal clearly touched the right buttons as did an appealing video display, showing beaches, mountains and a joyous people having fun.

The 2016 Games will feature beach volleyball on Copacabana, a marathon finish in Carnival's Sambadrome stadium and rowing under the city's iconic Christ the Redeemer statue.

Thousands of revelers waving Brazil's green-blue-and-yellow flags erupted in joy on Copacabana's sands after the vote was announced, kicking off a Carnival-style celebration in front of the big stage and screens broadcasting events from Denmark.

Rio won because we are a marvelous people. The Olympics in Rio will be wonderful, said Cecelia Barbossa, a 69-year-old lawyer partying on the beach.

Madrid had led the first round by 28 votes to 26 for Rio with Tokyo on 22 and Chicago last on 18. After Chicago's elimination, there was a strong switch to Rio in the second round, the Brazilians almost winning an outright majority, picking up 46 votes to 29 for Madrid and 20 for Tokyo.

STRONG APPEALS

Though Obama and his wife produced strong appeals in the day's first 45-minute presentation by Chicago, they were almost certainly undone by the emotional tugs provided by Lula and former IOC president Juan Antonio Samaranch for Madrid.

Lula raised the emotional stakes in his speech. This is a continent that has never held the Games, he said.

It is time to address this imbalance. The opportunity is now to extend the Games to a new continent. It's an opportunity for an Olympics in a tropical country for the first time, to feel the warmth of our people, the exuberance of our culture and the sensation of our joy.

Even more emotionally, Samaranch, now 89, pulled powerfully at the heart-strings of members when he spoke for Madrid. I know I am very near the end of my days, he said. May I ask you to consider granting my country the honor and also the duty to organize the games in 2016?

Obama's appearance, the first by a sitting U.S. president at an IOC session, provoked huge interest from IOC members, even though they are used to being courted by major political figures.

Obama told the IOC: I've come here today to urge you to choose Chicago for the same reason I chose Chicago nearly 25 years ago, the reason I fell in love with the city I still call home.

(Additional reporting by Karolos Grohmann, Kevin Fylan and John Acher in Copenhagen and Brian Ellsworth in Rio de Janeiro; Editing by Will Dunham)

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