OLYMPIA- Republican Dino Rossi took up the mantle of governor-elect Tuesday, but an unprecedented third vote count could keep Rossi and Democratic rival Christine Gregoire guessing until almost Christmas – or later.

Secretary of State Sam Reed, the state’s chief elections officer, certified Rossi as the victor by a mere 42 votes. Reed called it the closest governor’s race in U.S. history, with a margin of little more than a thousandth of 1 percentage point separating winner and loser.

Reed said Rossi’s machine recount victory means he’s legally the governor-elect. Rossi told a victory news conference he is moving forward with selecting a Cabinet and preparing plans to stir the anemic state economy.

He reached out to Democrats, who control both houses of the Legislature.

Rossi acknowledged his victory isn’t assured, however, since Gregoire and the state Democratic Party are expected to demand a manual recount of all or some of the state’s precincts on Friday.

He didn’t use the word “concede,” but made it clear he thinks Gregoire should drop her challenge. Rossi said she and the Democrats “have to decide if they’ll be looking at the best interest of the state of Washington and be gracious.”

Rossi, 45, a former legislative power who rose from poverty to riches in real estate investments, said: “If you count and recount and recount and keep on counting until you finally win, what do you really have in the end? An illegitimate governorship, that’s what you have in the end.

“It’s time to move forward, that’s the message.”

Rossi held a victory celebration Tuesday night in Bellevue.

“It feels good. We’re in the right spot,” he said. “It’s the second time we’ve been validated as the winner. This is over.”

Unlike Rossi’s public display of triumph, Gregoire, 57, the state’s attorney general for the last 12 years, kept out of sight and worked on a recount strategy – and her own transition efforts. She rejected the notion that Rossi had won.

“Senator Rossi and I are both moving ahead with our transition plans, even though the election is undecided,” she said in a statement. “It’s still the wise thing to do. By going ahead with our transition plans, both candidates will be in a position to lead the state in January.”

Her statement said the race remains too close to call, with what her campaign called “thousands of disputed ballots across the state.”

Democrats were still deciding how extensive the manual recount should be. Spokeswoman Kirstin Brost said the campaign and the party would prefer a full statewide recount of all 6,686 precincts, but might not be able to afford the cost.

The state wants a 25-cent-per-voter deposit at the time the recount is demanded – at least $700,000 for a statewide count.

A handful of Democratic activists huddled near the parking lot of Rossi’s campaign headquarters in Bellevue before his news conference, hoisting handmade signs saying, “Count Every Vote” and “We believe Chris.”

“A hand recount may change the race. It may not, but the reality is, until we have one, we won’t know who won this race,” said Gayatri Eassey, 23, president of Young Democrats of Washington.

Both Reed and outgoing Gov. Gary Locke advocated a full statewide recount rather than “cherry-picking” selected counties. As it is, a manual recount probably would take until Dec. 23, Reed said. If Democrats recount only part of the state and it flips the election to Gregoire, state law mandates a full hand recount in the rest of the state.

That probably could be completed in time for inauguration on Jan. 12, but if either party goes to court, all bets are off, Reed said.

Reed, a Republican, said he has full confidence in the newly certified recount numbers.

“I would be comfortable calling the race right now,” he said. “I’m not sure what value there is to have another recount.”

Locke supports a new count, but said: “We need to resolve this as quickly as possible so the next administration can take office, to have a very seamless transition. So much is at stake.”

Brost said Democrats have identified potential irregularities in a number of Washington’s 39 counties. Ideally, the entire state will be re-canvassed, but that might not be financially possible, she said.

Rossi disputed Democrats’ plea of poverty. He said Republicans are “prepared to meet any option they come up with.”