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Pakistani child education activist Malala Yousafzai and Kailash Satyarthi, an Indian child rights campaigner, have jointly won the Nobel Peace Prize.
At the age of just 17, Malala is the youngest ever recipient of the prize.
The teenager was shot in the head by Taliban gunmen in October 2012 for campaigning for girls' education. She now lives in Birmingham in the UK.
The Nobel committee praised the pair's "struggle against the suppression of children and young people".
Mr Satyarthi has maintained the tradition of Mahatma Gandhi and headed various forms of peaceful protests, "focusing on the grave exploitation of children for financial gain," the committee said at the Nobel Institute in Oslo.
The 60-year-old founded Bachpan Bachao Andolan, or the Save the Childhood Movement, which campaigns for child rights and an end to human trafficking.
Reacting to the news, Mr Satyarthi told the BBC: "It's a great honour for all the Indians, it's an honour for all those children who have been still living in slavery despite of all the advancement in technology, market and economy.
"And I dedicate this award to all those children in the world."
Malala was taken out of her classroom in her new home city of Birmingham to hear the news on Friday.
Her father, Ziauddin Yousafzai, told the Associated Press that the prize would "boost the courage of Malala and enhance her capability to work for the cause of girls' education".
'Heroic struggle'
Thorbjorn Jagland, chairman of the Norwegian Nobel Committee, paid tribute to Malala's achievements.
"Despite her youth, Malala Yousafzai, has already fought for several years for the right of girls to education and has shown by example that children and young people too can contribute to improving their own situations," he said.
"This she has done under the most dangerous circumstances. Through her heroic struggle she has become a leading spokesperson for girls' rights to education."
The committee said it was important that a Muslim and a Hindu, a Pakistani and an Indian, had joined in what it called a common struggle for education and against extremism.
This year's prize is likely to be seen as an uncontroversial choice from a Norwegian Nobel committee which has not shied away from controversy in recent years, says the BBC's Lars Bevanger in Oslo.
Norway's relations with China are still suffering after a Chinese dissident won the peace prize in 2010, our correspondent adds.
Malala and Mr Satyarthi will now be invited to attend an award ceremony in Oslo in December to receive a medal and $1.4m (ÂĢ860,000) pounds in prize money.
'Pride of Pakistan'
Malala first came to attention in 2009 after she wrote an anonymous diary for BBC Urdu about life under Taliban rule in north-west Pakistan.
She was shot when gunmen boarded her school bus in the Swat Valley.
She has since recovered from the attack and has remained in the public eye, publishing an autobiography and addressing the UN General Assembly.
Pakistan's Prime Minister Nawaz Sharif congratulated Malala Yousafzai, calling her the "pride" of his country.
"Her achievement is unparalleled and unequalled. Girls and boys of the world should take the lead from her struggle and commitment," he said in a statement.
Malala was named one of Time magazine's most influential people in 2013, and awarded the EU's prestigious Sakharov human rights prize that year.
She had been hotly tipped to win last year's Nobel Peace Prize.
Her win in 2014 takes the number of women awarded the prize to 16 out of 95.
This year's record number of 278 Nobel Peace Prize nomineesincluded Pope Francis and Congolese gynaecologist Denis Mukwege, although the full list was kept a secret.
Former NSA contractor Edward Snowden and Russian newspaper Novaya Gazeta had also been tipped as favourites for the award.
A Pakistani and an Indian...
COngrats!
They are both GREAT Humans and assets to HUMANITY.. God Bless them both. I may add both deserve the Award.
Congratulations.... to Malala Yousafzai
and Kailash Satyarthi,for jointly winning
the Nobel Peace Prize.
Congratulations to both of them. They will make great contribution to their respective country's future. They say it takes one determine person to change the world.
Congratulations to Malala and Kailash. Two brave souls in a dangerous part of the world.
Malala has wisdom beyond her age. I was entranced by her interview on the Jon Stewart set that I saw live at the Comedy Central Studio last year.
Even Jon Stewart was overwhelmed by Malala - he admitted it and I've never seen him like he was - though all the other times were on television.
Malala has wisdom beyond her age. I was entranced by her interview on the Jon Stewart set that I saw live at the Comedy Central Studio last year.
Even Jon Stewart was overwhelmed by Malala - he admitted it and I've never seen him like he was - though all the other times were on television.
Whenever I see something positive that has to do with young people,I feel much better knowing there are some out there who can step up to the plate when needed.
I watched an interview with her and was just taken with what I heard coming from her.