WRAPUP 17-Obama makes history with Democratic nomination

* Clinton does not concede

* Obama wins Montana, Clinton takes South Dakota

* McCain, Obama start November election campaign

By John Whitesides, Political Correspondent

WASHINGTON, June 3 (Reuters) - Barack Obama captured the Democratic presidential nomination on Tuesday, capping a rapid rise from political obscurity to become the first black to lead a major U.S. party into a race for the White House.

Rival Hillary Clinton, a former first lady who entered the race 17 months ago as a heavy favorite, briefly congratulated Obama but did not concede. The New York senator said she would consult with party leaders and supporters to determine her next move.

A surge of support from uncommitted delegates helped give Obama the 2,118 votes he needed to clinch the nomination as the lengthy Democratic battle concluded with an Obama victory in Montana and a Clinton win in South Dakota.

Obama will be crowned the Democratic nominee at the convention in August and will face Republican John McCain in November's election to choose a successor to President George W. Bush.

"Tonight, we mark the end of one historic journey with the beginning of another," Obama told a victory celebration in St. Paul, Minnesota, at the site of the Republican convention in September.

"Tonight, I can stand before you and say that I will be the Democratic nominee for President of the United States," he told 17,000 cheering supporters. Another 15,000 supporters gathered outside the arena.

The win by Obama, son of a black Kenyan father and white mother from Kansas, marked a milestone in U.S. history. It came 45 years after the height of the civil rights movement led by Martin Luther King, who was assassinated in 1968.

It followed one of the closest and longest nomination fights in recent U.S. political history. Clinton, who would have been the first woman nominee in U.S. political history, won more than 1,900 delegates.

She told New York members of Congress she would be open to becoming Obama's vice presidential running mate, and her backers turned up the pressure on Obama to pick her as his No. 2.

She told a cheering crowd of supporters in New York City that she would work for party unity but made no public overtures to Obama.

"This has been a long campaign and I will make no decisions tonight," she said. "In the coming days I'll be consulting with supporters and party leaders to determine how to move forward with the best interests of our party and my country guiding my way."

Obama lavished praise on Clinton after beating her.