Revelers around the world rang in the New Year with the usual fireworks and fanfare accompanied by calls for peace from the US and Iraqi presidents.
In New York's Times Square, hundreds of thousands crowded amid tight security and special tributes to those who brought relief to the hurricane-devastated city of New Orleans.
Braving freezing temperatures and sleet, close to 1 million people crammed into the "crossroads of the world" for the New Year celebration.
The square erupted in song, cheers and a cloud of confetti after the crowd counted down the last seconds of the year watching the traditional crystal ball make its midnight descent to illuminate the giant numerals "2006."
In New Orleans itself, crowds gathered in the historic French Quarter to bid farewell to a tragic year in which more than 1,000 people were killed in the devastation of Hurricane Katrina.
Storms in California forced the cancellation of a street party in Los Angeles and in the San Francisco area, thousands were evacuated due to mudslides and floods.
Security was tight for festivities in major cities worldwide, with 25,000 police and paramilitary gendarmes on duty in France amid fears of a repeat of the urban violence seen in towns and cities nationwide last month.
However, despite the torching of some 425 cars nationwide, and 362 arrests, police reported no serious outbreaks of unrest, and 500,000 revellers welcomed the arrival of the new year in Paris' most famous avenue, the Champs-Elysees, according to police.
Street parties and glittering displays marked the festivities from Sydney to London, with crowds packing the banks of the River Thames to see the 10-minute blaze of fireworks focused on the London Eye, the city's landmark ferris wheel, lit up in the colors of the five Olympic rings to celebrate London being awarded the 2012 Games.
The festivities also gave Londoners a chance to put the deadly July 7 terror attacks in the past.
In Baghdad, Iraqi President Jalal Talabani said he hoped a new government would help improve public services and defeat the insurgency this year.
Earlier in Sydney, 1,700 police patrolled the streets and beaches to prevent a possible repeat of suburban race riots there earlier this month. The Opera House was illuminated at midnight by the most spectacular pyrotechnical display ever seen in the city.
In Beijing, bells and drums were sounded 108 times at midnight to mark an auspicious start to the year, signifying the elimination of worldly troubles in accordance with Buddhist tradition.
Authorities in Indonesia fanned out in Central Sulawesi Province after a bombing in a crowded market on Saturday left eight dead.
The festive mood across much of the region contrasted with last year, when prayer vigils and fundraising events replaced jubilant bashes in the wake of the December 2004 tsunami.