Nearly all of the ballots have been counted in Turkey's election and the ruling Justice and Development Party (AKP) has taken almost half of the votes. The outcome gives a clear boost for President Recep Tayyip Erdogan.
Results reported by TRT television showed that the ruling AKP won more than 49 percent of the vote and was projected to get 316 seats in the 550-seat parliament.
"Nobody should be in a state of defeat. Today there are no losers but winners," Davutoglu told cheering crowds in his home city of Konya. "We are coming to open our hearts for everyone no matter if they voted for us... We are coming to rebuild new Turkey along with each and every citizen."
But the government will have its work cut out in the months ahead. Since June's poll, a ceasefire with Kurdish militants has collapsed, the war in neighboring Syria has worsened and Turkey - a NATO member state - has been buffeted by two "Islamic State"-linked suicide bomb attacks that killed more than 130 people.
Sunday's poll results could aggravate deep splits in Turkey between pious conservatives and secularists suspicious of President Erdogan's rising authoritarianism and Islamist ideals.
There is also the Kurdish insurgency that is growing following the collapse this summer of a fragile 2013 ceasefire and peace process. In the largest Kurdish-majority city Diyarbakir,youths threw stones at police and lit fires as news of the election returns filtered in.
Unrest in Kurdish southeast
The pro-Kurdish opposition Peoples' Democratic Party (HDP) said on Sunday the outcome of Turkey's general election was the result of a deliberate policy of polarization by President Tayyip Erdogan. The party canceled rallies after the deadly attack on its supporters in Ankara and waves of coordinated attacks on its party offices.
HDP's co-chairman Selahattin Demirtas told reporters that "there wasn't a fair or equal election... We were not able to lead an election campaign. We tried to protect our people against attacks," he said.
President Erdogan has launched a crackdown on opposition media and tightened his grip on the judiciary. His political rivals have been under fire following a corruption investigation into Erdogan's inner circle. The developments have alarmed and alienated many of his traditional allies in Europe and the United States.
As the smoke from the bruising campaign cleared, it appeared that the main opposition People's Republican Party (CHP), a center-left secularist party, showed similar results to the last vote.
But the far-right Nationalist Movement Party (MHP), which was hovering at about 11 percent of the vote, showed a sharp decline from the 16 percent it earned in June.
Analysts were puzzling how the AKP was able to carve away votes from the pro-Kurdish HDP and arch-nationalist MHP, two political movements diametrically opposed to one another.
President Erdogan was not on the ballot paper but he remains the most powerful leader for generations. He resigned as prime minister last year because of term limits and took over the non-partisan post of president.
But even in that role, Erdogan has waded into political fights and made no secret his ambition was to amend the constitution to create a strongman-style executive presidency for himself to rule the country.
Sunday's results were unlikely to give a big enough win for his allies in the AKP to change the constitution but it will make it easier for Erdogan to influence the government from the enormous AK Saray palace he had built in Ankara.
Voter turnout was 86.4 percent, according to state broadcaster TRT.
jar/jm (dpa, Reuters, AP)