Japan celebrated its space milestone, as the first part of its Kibo laboratory was maneuvered into place by Japanese astronaut Takao Doi.

"It is really the moment we, JAXA, became a visual partner on orbit," Tetsuro Yokoyama, Deputy Project Manager for the Kibo lab, said, referring to the Japan Aerospace Exploration Agency.

"Takao Doi's performance of robotics operation today was spectacular, especially for the Japanese public," Yokoyama told reporters at the Johnson Space Center in Houston.

The Kibo laboratory, to be installed in three stages through 2009, is a micro-gravity research facility that aims to open a vital new stage in deeper space exploration.

With its installation, Japan gains a foothold on the ISS alongside the United States, Russia and Europe, whose laboratory Columbus was delivered to the station in February.

NASA declared the seven hour spacewalk complete at 4:19am (0819 GMT) shortly after Mission Specialist Rick Linnehan and Flight Engineer Garrett Reisman returned to the ISS and its hatches were shut.

In the first task of their spacewalk, the pair prepared the Japanese logistics unit for removal from the cargo bay of space shuttle Endeavour, which docked Wednesday at the ISS.

Later, Doi and shuttle Commander Dominic Gorie used the space shuttle's robotic arm to lift the unit -- a 4.2-tonne logistics module -- to its temporary home on the orbital outpost.

Bolts latching the unit atop the Harmony module of the ISS were secured at 4:06am (0806 GMT), NASA officials said.

The module is to be moved later atop the main portion of the Kibo lab where it will serve as a storage space for experiments and supplies.

The spacewalkers also installed two new components on the Canadian robotic arm Dextre, while officials on the ground grappled with a new problem on the instrument.

The "Orbital Replacement Unit tool change out mechanisms" will function like hands on the two arms of the Canadian-built "dextrous manipulator," capable of latching on to payloads or tools, a NASA television commentator said.

But during the night officials discovered a power failure on Dextre, and were scrambling to figure out how to fix it before the freezing temperatures of space damage the robotic arm.

Engineers think the problem may be due to a design error in a data cable on a spacelab pallet -- a cable that will no longer be used once Dextre is put in position on the ISS, Pierre Jean of the Canadian Space Agency said.

NASA and its partners plan to uplink a software patch to restore power to Dextre before its "thermal clock" runs out in roughly four days, and will know in 24 hours if the effort has succeeded, Jean said.

Kibo will be the largest by far of the four research modules on board the station and represents the most important Japanese input to the project, to which Japan has contributed a total of 10 billion dollars.

The larger cylindrical heart of the lab that will allow astronauts to work and conduct experiments in a shirt-sleeves environment, is to arrive on space shuttle Discovery due to launch May 25.

The final Kibo installment, an inter-orbit communications system unit called the Exposed Facility, is due for delivery in March 2009.

The 16-day mission for Endeavour is the longest mission at the space station and crew members will conduct five spacewalks totaling some 30 hours of work.

At mission control in Houston, Endeavour's spacewalk director paused to marvel at Friday's accomplishments.

"It is a triumph when we are able to build a spacesuit that can protect crew members for a seven-hour spacewalk outside in the cold vacuum of space, while they're able to pull off a construction project," Zebulon Scoville remarked.

"Athletically, it is really on par with climbing the highest mountains on the planet," he said of the astronauts' performance.

"When all this comes together ... you have the earth passing by underneath you, you have the crew out on the end of a spacelab pallet on this structure that's been built by the world, and it really is an aesthetic sight of beauty," he said.

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