Thousands of flag-waving fans blocked Lisbon's main avenue, Avenida da Liberdade, as car horns could be heard blaring across the city.

"This is the first time we are at a final, the whole team needs to be congratulated," said Victor Pinto while his 15-year-old son kept repeating "This is fantastic! This is fantastic!".

Fans kicked crunched beer cans in impromptu street football games and danced in the street while others banged pots and pans from apartment windows.

Portugal has reached the semifinals of a major tournament three times -- at the 1984 and 2000 European championships and the 1966 World Cup -- but have never progressed beyond this stage before.

"We were very confident and we deserved to win," said 27-year-old Isabel Pinheiro who watched the match with friends at a cafe in Almada, the working-class suburb where Portuguese star Luis Figo hails from.

Many fans, including Prime Minister Jose Manuel Durao Barroso, are now dreaming of winning the final on Sunday.

"As I have said before, the sky is the limit. Now we are going to the final and God willing, we will win," he told state television RTP after watching the match at Lisbon's Alvalada stadium.

Street celebrations were reported on Portugal's mid-Atlantic Azores islands as well as on the Madeira archipelago off the coast of Morocco.

"Portugal is in the final!" screamed top-selling daily Correio da Manha on its Internet site while sports daily A Bola preferred "And so the Orange was squeezed" a reference to the national colour of the Netherlands.

Police reported no trouble as the thousands of Dutch fans who traveled to Portugal for the match commiserated.

MEDIA PASSION
The front pages in Portugal turned red and green on Thursday in a tribute to the national team's qualification for the.

"The unstoppable force," blared the front page of the Record sports daily. "We are at the gates of glory."

"Superb," said its rival A Bola. "Another great game and we're in the final. What a team and what supporters. We have made history."

"The Portuguese performance was always superior and the team deservedly reached the final," said the Jornal de Noticias daily.

There was widespread praise for Figo, the national hero whose halo had slipped after he was substituted in the quarter-finals against England and stalked to the dressing rooms.

"Luis Figo was back to his best and showed he is the leader of the national team," said the A Capital daily.

And the Diario de Noticias told its readers, they "now had the right to dream" of a first major success.