Mikhail Saakashvili (search), a fiery 36-year-old lawyer and anti-corruption crusader, was inaugurated Sunday as Georgia's new president, taking the helm amid high hopes that he can bring prosperity to the beleaguered ex-Soviet republic.

Saakashvili, his hand on Georgia's constitution, took the presidential oath in front of the parliament building where two months ago he led protesters who evicted longtime former President Eduard Shevardnadze (search).

Four huge white and red medieval banners used by Saakashvili's opposition movement were hung on the building. After being sworn in, Saakashvili signed an act making the medieval banner Georgia's new flag.

"I will defend Georgia's constitution, perform the presidential duties with honor and ensure security and dignity of our citizen," Saakashvili said in his presidential oath.

Armed with a powerful mandate after winning more than 96 percent of the vote in this month's election, the U.S.-trained lawyer set an ambitious agenda, pledging to lift Georgia from its economic decline, civil wars and endemic corruption into a new era of stability and growth.

"Shevardnadze left us a treasury emptied by robbery," the new president said in a televised news conference late Saturday. "So we face intensive, painstaking work to lift the economy up. The most important thing is to change the system, which was built on corruption."

U.S. Secretary of State Colin Powell (search) attended the inauguration, a sign of Washington's interest in stability in Georgia — the site of a planned pipeline for Caspian Sea oil and part of a volatile region surrounded by Russia, Turkey and the Middle East.

Powell, who earlier met with Saakashvili, pledged that the United States would provide $166 million of assistance to Georgia in the current fiscal year and conveyed an invitation from President Bush for Saakashvili to visit Washington on Feb. 25.

Powell said he hopes Georgia will "serve as an example to the rest of the region and the rest of the world of what can be accomplished with a democratic form of government."

Russia and the United States have been wary of each other's activities in Georgia, with Moscow being nervous about the presence of U.S. military trainers and Washington reminding the Kremlin of its pledge to withdraw military bases from Georgia.

Powell said Sunday that Georgia "shouldn't be an area for competition between the United States and any of your neighbors," but emphasized that the United States expects the Russian military to leave.

Saakashvili also vowed in a televised news conference late Saturday to improve strained relations with Russia, which controls most of Georgia's energy supplies and maintains two military bases on its territory.

But he warned that "Russia must not treat us as a colony" and emphasized that Georgia will seek closer integration with Europe, saying that "our place is in Europe."

Pushing his unification efforts before the ceremony, Saakashvili flew to the separatist region of Adzharia in a bid to ease tensions between its leaders and the central government.

Saakashvili watched a military parade with Adzharian leader Aslan Abashidze, a longtime political foe, and both expressed hopes for improved relations. However, Abashidze supporters scuffled with backers of Saakashvili, who want the Adzharian leader out.

Shevardnadze resigned after three weeks of peaceful protests that followed parliamentary elections widely seen as fraudulent. Saakashvili, who led the street protests and was the loudest voice calling for Shevardnadze's resignation, instantly became the favorite to replace him.

"He's smart and brave. He likes working with people and is doing his best to make things good for us," said Otar Zhordania, 73 who was among the crowd that gathered to watch the inauguration.

Russian Foreign Minister Igor Ivanov also arrived Sunday for the inauguration.

Georgia, with about 5.5 million people, was comparatively well-off during Soviet times, its economy bolstered by tourism and its famous wines.

But after the collapse of Communism, the country's industries collapsed and Georgia was torn by the separatist wars in Abkhazia and South Ossetia. The country also has been plagued by widespread corruption, low pensions and frequent electricity outages, even in the capital.