Zinedine Zidane shattered their dreams of making a World Cup final for the first time ever with a 33rd minute penalty - giving them a 1-0 win - which proved the decisive moment in a tight and balanced semi-final match.

Scolari had no qualms about the penalty decision, and was philosophical about the defeat, his first in 13 World Cup finals matches, and against a team Portugal have failed to conquer since 1975 including three championship semi-finals, this one and the Euro '84 and 2000 editions.

"We did everything possible but if you don't score you don't win," said the Brazilian, who for the first time in three major tournaments failed to take his side to the final.

He warned Italy they will have their work cut out against France in the final in Berlin on Sunday, while paying tribute to his players who matched Portugal's best ever World Cup campaign.

"I don't believe France were the better team. it was a balanced match. But France are an excellent team, a team with a lot of capacity and ability and they did enough to reach the final," he said.

"One penalty decided it. It happens. But we're a very small country and it is difficult to reach the World Cup final.

"I now need to work with the players. We had a dream and we were nearly there but we have another match now - for third place in the World Cup, which should also be an interesting game.

"On Saturday we will have new difficulties and we must work on a strategy to beat Germany. We need to gather strength."

Portugal dominated possession against France and created twice as many chances, but a solid defence superbly marshalled by Lilian Thuram and William Gallas allowed Fabien Barthez to keep a clean sheet.

Scolari knows he must put the disappointment behind him and lift his players back up for one last push in Stuttgart, keenly aware of the massive outpouring of patriotism his side's heroics have created in Portugal.

"I'll be ready. I just need to soak in the defeat first," he said.

"What our team has done already is excellent. I'm proud of this team.

"Our team has continued to play like we wanted to play. It has worked well from the beginning. We reached the last four. We have a group of fantastic athletes here and I have only good memories of this World Cup."

Portuguese Prime Minister Jose Socrates, who traveled to Munich to watch the match, joined in the tributes, ensuring Portugal will get a ticker tape welcome when they return to Lisbon.

"I think the team did a lot for Portugal's international prestige and we are indebted to them for this. I am very proud of this squad and I am sure all Portuguese people are as well," he told private television SIC after the game.

Disappointed captain Luis Figo, who was enticed out of international retirement to guide the team in Germany, was also a proud man but couldn't help feeling that they deserved better.

"We are very disappointed. I thought we deserved a better result than this," said the 33-year-old, who will make his last appearance in a Portuguese strip in the clash with Germany.

"We had more control of the game but we couldn't put away our chances. It is a pity for us as we so wanted a place in the final.

"I am proud of the team and we want to finish off with a win over Germany."