Richard Holbrooke, the US diplomat who brokered the Dayton Peace Accord for Bosnia in 1995, told the BBC that “a major, major thug has been removed from the public scene”.
“One of the worst men in the world, the Osama Bin Laden of Europe, has finally been captured,” Mr Holbrooke told BBC World News America.
The arrest of Mr Karadzic and other indicted war criminals is one of the main conditions of Serbian progress towards European Union membership. The EU Enlargement Commissioner Olli Rehn welcomed the news.
“This is certainly a milestone in Serbia’s co-operation with the international criminal tribunal on the former Yugoslavia. It proves the determination of the new government to achieve full co-operation with the tribunal,” Mr Rehn said.
UK Foreign Secretary David Miliband said: “This is good news.
“This arrest will help close the region’s decades of conflict, and pave the way for a brighter, European future for Serbia and the region.”
In Sarajevo, people gathered on the streets to celebrate news of the arrest.
“This is the best thing that could ever happen, you see people celebrating everywhere. I called and woke up my whole family,” Sarajevo resident Fadil Bico told Reuters.
Mr Karadzic denied the charges against him soon after the first indictment and refused to recognise the legitimacy of the UN tribunal.
The UN says Mr Karadzic’s forces killed at least 7,500 Muslim men and boys from Srebrenica in July 1995 as part of a campaign to “terrorise and demoralise the Bosnian Muslim and Bosnian Croat population”.
He was also charged over the shelling of Sarajevo, and the use of 284 UN peacekeepers as human shields in May and June 1995.
After the Dayton accord that ended the Bosnian war in 1995, the former nationalist president went into hiding.
International pressure to catch Mr Karadzic mounted in spring 2005 when several of his former generals surrendered and a video of Bosnian Serb soldiers shooting captives from Srebrenica shocked television viewers in former Yugoslavia.
He had been a close ally of former Yugoslav President Slobodan Milosevic, who was himself extradited to The Hague tribunal in 2001, but died in 2006, shortly before a verdict was due to be delivered in his case.