The ceremony, held in Oslo, opened with a speech by the chairman of the Nobel committee stressing the role that the European Union and the organizations that preceded it had played in preventing conflict.

"What this continent has achieved is truly fantastic," Thorbjorn Jagland said. "From being a continent of war to becoming a continent of peace," .

He then highlighted the role played by Germany and France in particular, in laying the foundation that led to the creation of what is now a bloc of 27 sovereign states.

"The reconciliation between Germany and France is probably the most dramatic example in history to show that war and conflict can be turned so rapidly into peace and cooperation," Jagland said. "The presence here today of German Chancellor Angela Merkel and French President Francois Hollande make this day very particular, symbolic for all of us, I believe," he added.

This was met with applause from the audience, which included the leaders of all but six of the EU's member states.

Clearly moved by those words, Merkel and Hollande, who were seated in the first row, stood up and, with their hands joined, they saluted the crowd.

European Council President Herman Van Rompuy,, European Commission President Jose Manuel Barroso and Martin Schulz, the president of the EU Parliament, later accepted the award.

In his speech, Van Rompuy struck a similar tone.

"Whenever I hear the words 'freundschaft' and 'amitié', I am moved," Van Rompuy said, using the German and French names for friendship.

After the ceremony, Merkel described the EU's receiving the prize as "unbelievably encouraging."

"I believe it is a wonderful moment to take the time to think about what our predecessors have achieved," the chancellor told the private German television station RTL. "Above all it encourages all who are polticially active today not to let up."

No avoiding the debt crisis

Despite the fact that Monday's ceremony was a joyous occasion, the European sovereign debt crisis was never far from anybody's mind. Jagland acknowledged that Europe was currently "undergoing great difficulties."

European Commission President Barroso stressed, however, the bloc's determination to safeguard its common currency.

"Today one of the most visible symbols of our unity is in everyone's hands. It is the euro, the currency of our European Union," Barroso said. "We will stand by it."

Merkel cautioned. however, that though a lot had been achieved in efforts to overcome the eurozone's debt crisis, there was still a long of work to do.

"I'm cautiously optimistic," she said.

Later in the evening, the Nobel Prizes in the other categories - including literature, physics, medicine, chemistry and economics - were handed out at a ceremony in Stockholm.

pfd/mkg (dpa, AFP, Reuters)