PARIS (Reuters) - Euphoria over the killing of September 11 mastermind Osama bin Laden was tempered in the West Monday by fears of retaliation, and world leaders and security experts urged renewed vigilance against attacks.

Americans celebrated on the streets and U.S. markets rallied on hopes bin Laden's death could ease the threats hanging over much of the developed world -- but even President Barack Obama said that terrorist attacks would continue to be a concern.

France's President Nicolas Sarkozy hailed the killing as a coup in the fight against terrorism, but both he and Foreign Minister Alain Juppe warned it did not spell al Qaeda's demise.

British Prime Minster David Cameron also said the West would have to be "particularly vigilant" in the weeks ahead.

As he announced bin Laden's death, Obama said: "There's no doubt that al Qaeda will continue to pursue attacks against us. We must and we will remain vigilant at home and abroad."

Some security experts fear the 10th anniversary of the September 11 attacks could further incite al Qaeda supporters.

"Whilst we in the West might have the satisfaction of justice having been dealt to a terrorist, many will still see Osama bin Laden as a martyr. Make no mistake: violent jihadists will react to this," Julian Lindley-French of London's Chatham House think-tank told Reuters Insider television.

Roland Jacquard, head of the International Terrorism Observatory in Paris, said the United States would be targeted.

"The way in which he was killed, by a military commando, shows this will have important consequences for the future. It will be a call for Jihad, he will remain a very real-life martyr for the rest of the organization," Jacquard told RTL radio.

Already Monday, Islamic militants hinted at revenge.

"Oh God, please make this news not true... God curse you Obama," said one message on an Arabic language forum. "Oh Americans... it is still legal for us to cut your necks."

"Osama may be killed but his message of Jihad will never die. Brothers and sisters, wait and see, his death will be a blessing in disguise," said a poster on another Islamist forum.

CONSTANT ALERT

In Washington, a crowd gathered outside the White House as Obama announced the conclusion of a decade-long manhunt, singing patriotic songs and chanting slogans.

The killing was hailed by George W. Bush, who was president when al Qaeda hijackers slammed airliners into the Pentagon and New York's World Trade Center.

"The fight against terror goes on, but tonight America has sent an unmistakable message: No matter how long it takes, justice will be done," Bush said. New York Mayor Michael Bloomberg said he hoped the news would bring closure to those who lost loved ones on September 11.

The dollar and stocks strengthened and oil, gold and silver prices all fell as markets received an immediate boost from the news.

The United States and much of Europe is on constant alert for an attack by al Qaeda or affiliated extremist organization.

France has been on red alert, the third-highest level in a four-step scale, since suicide bomb attacks in London in 2005 and has been especially vigilant since bin Laden criticised criticizedthe country's attitude toward Muslims last October.

The United States warned its citizens worldwide of "enhanced potential for anti-American violence," advising them to avoid mass gatherings and travel, and Australia issued a similar warning. Iraq's army and police went on high alert.

Japan said it would step up patrols around its military bases to guard against revenge attacks, and in countries with big Muslim populations, some foreign schools, embassies and other potential targets put extra security measures in place.

India, whose ties with neighboring Pakistan are strained, voiced concern that bin Laden was found at a luxury compound just 60 km (35 miles) from the Pakistani capital Islamabad, saying this suggested terrorists could find sanctuary there.

"Osama bin Laden's death doesn't mean we can relax now and assume the danger is past," Wolfgang Ischinger, head of the Munich Security Conference, told German radio.

"I expect al Qaeda will try to get revenge against the Americans and the Pakistan government... Even if a 'battle' has been won, the 'war' is far from over."

(Additional reporting by Chris Allbritton in Islamabad; Vicky Buffery and Alexandria Sage in Paris; Erik Kirschbaum in Berlin and staff in London, Washington, Tokyo, Baghdad and Dubai; Editing by Sonya Hepinstall)