India's ruling Hindu nationalists suffered a shock defeat in the world's largest election as the Gandhi dynasty Congress party surged back to power after a campaign appealing to the rural poor. Prime Minister Atal Behari Vajpayee resigned Thursday to President Abdul Kalam, who asked him to remain as caretaker premier until a new government is formed. The Congress party, led by Sonia Gandhi, the Italian-born heir to India's most famous political dynasty, said it will ask Kalam, the ceremonial head of state, to let it form a new government. Congress, which left power in 1996 after ruling India for 45 years, was to meet late Thursday to decide on its choice for prime minister with many pushing for Gandhi, the 57-year-old widow of slain former premier Rajiv Gandhi. "All the workers want it, party officials want it. Now she will have to decide whether she wants to be the prime minister," Patel said. The Hindu nationalists systematically denounced Gandhi during the campaign, saying she was still a foreigner even if she only ever appears in Indian dress and speaks in fluent, if accented, Hindi. With 465 of the 543 seats declared by the Election Commission, Congress and its allies had won 190 seats compared with 164 for Vajpayee's Bharatiya Janata Party (BJP) and its partners. The balance will be held largely by populist regional parties whose support will be crucial for a stable government. India's historic rival Pakistan expressed hope that the new government will proceed with a dialogue between the two countries initiated last year by Vajpayee, who declared he was on his last bid to make peace in South Asia. Congress spokesman Anand Sharma told AFP the party "is committed to working towards creating lasting peace in the region." Islamic parties in Pakistan rejoiced, calling the election payback for bloody anti-Muslim riots two years ago in the BJP-ruled western state of Gujarat -- where the Hindu nationalists lost seats Thursday. At the headquarters of Congress, which led India to independence from Britain, a huge balloon shaped as an open palm, the 119-year-old party's symbol, dropped to the ground as supporters lit firecrackers. "Long live Congress! Down with the BJP!" they shouted. Sonia and Rajiv's son, Rahul Gandhi, Thursday became the fourth-generation MP from the dynasty. The 33-year-old former financial consultant, who spent much of his 20s in Britain and the United States, won from the family's stronghold Amethi in Uttar Pradesh. More than 370 million people voted in the national election, held on five dates from April 20 to allow poll workers, police and soldiers to fan out to the nearly 687,500 voting stations. **PHOTO CAPTION*** Atal Bihari Vajpayee at his residence in New Delhi, India, in this Thursday, March 25, 2004 file photo. (AP)