SPAIN'S incoming leader Jose Luis Rodriguez Zapatero indicated yesterday he would pull the country's troops out of the “disastrous” occupation of Iraq in a major swing from his predecessor's pro-American foreign policy. The European Union, concerned by growing signs that the Madrid train bombings may have been carried out by Islamist militants, called emergency counter-terrorism talks. Zapatero's Socialists swept to office on Sunday in what some analysts said could constitute an alarming first case of Islamist militants influencing, by violence, the outcome of a major Western election. Zapatero himself called his triumph a first consequence of the Iraq war's unpopularity with Spaniards. “The second will be that the Spanish troops will come back,” he said. “Mr Blair and Mr Bush must do some reflection and self-criticism... you can't organise a war with lies,” he said in remarkably frank comments for the next prime minister of Western Europe's youngest democracy and fifth largest economy. President George W. Bush called to congratulate 43-year-old Zapatero. “The two leaders said they both looked forward to working together particularly on our shared commitment to fighting terrorism,” a White House spokesman said. Zapatero, due to take office within the next month, yesterday repeated several times his campaign pledge to pull out troops unless the United Nations takes charge in Iraq by mid-year - but added that scenario was unlikely. Spain has 1'300 troops in parts of south-central Iraq. Critics of the government have argued that the Madrid bombings were the price Spain paid for backing the Iraq occupation. Most commentators saw Zapatero's shock election victory as driven by anger over Jose Maria Aznar's handling of the suspected al Qaeda attack on Madrid commuter trains. After Thursday's attacks Aznar's government initially blamed the armed Basque separatist group ETA, which denied involvement. Sunday would go down in history as “the day when Islamic fundamentalism was seen as dictating the outcome of a European election,” said Wilfried Martens, head of the European People's Party, an umbrella group for European conservative parties. With almost all votes counted, the Socialists had won 42.6 percent of the vote to the PP's 37.6 percent. With 164 seats in the lower house of parliament, 12 short of an absolute majority, Zapatero has said he intends to govern through dialogue with other groups. He ruled out the possibility of a coalition with regional parties. But the PP will remain by far the largest single force in the upper house or Senate, potentially making it difficult for a Socialist government to pass legislation. The Spanish stock market dropped sharply on Monday amid mounting suspicions of al Qaeda involvement in the bombings and uncertainties over the Socialist party's economic agenda. Some 12 billion euros was wiped from the value of leading companies. But in a nod to investors in Spain, Zapatero lined up well-known free-marketeer Miguel Sebastian as his chief economic advisor. Sebastian is tipped to take the economy ministry. Zapatero said his immediate priorities would be “fighting terrorism” and a more “pro-European” foreign policy. The EU's Irish presidency announced that EU justice and home affairs ministers would hold emergency counter-terrorism talks in Brussels on Friday. Zapatero's surprise win has changed the EU's balance of power, robbing pro-U.S. supporters of the Iraq war, led by Tony Blair, of an important ally. It may also open the way for compromise on a stalled EU constitution blocked by Aznar. Zapatero said he wants “cordial” ties with Washington but used the word “magnificent” to describe the relations he sought with France, Germany and other EU members.