Spain's ruling Socialist party was defeated in local and regional elections by the center-right Popular Party (PP).

With municipal votes counted, PP had a 10-percentage point lead, winning in virtually all 13 regions and losing bastions such as Barcelona and Seville. Jubilant PP supporters were seen celebrating outside their party headquarters in Madrid.

Voting took place amid mass protests against high unemployment and the government's economic policies. What began as a sit-in in Madrid's central Puerta del Sol square a week ago has turned into a national protest, spreading to Barcelona, Valencia, Seville and Bilbao, and the demonstrators say the rallies will continue.

Prime Minister Jose Luis Rodriguez Zapatero conceded defeat but ruled out early general elections, saying three years of economic crisis had taken their toll.

"It destroyed thousands of jobs. It is a crisis that had profound effects on citizens' morale. I know that many Spaniards suffer great hardship and fear for their futures," Zapatero stressed, but promised to pursue job-creating reforms until the end of his mandate in March of next year.

Spain's overall jobless rate soared to 21% in the first quarter of this year, the highest in the industrialized world. Youth unemployment stands at 45%.