LOS ANGELES (Reuters) - "Shakespeare in Love‘ scored a major upset on Sunday night by winning the Academy Award for best picture over favourite "Saving Private Ryan" in a historic night at the Oscars. Italy‘s Roberto Benigni was named the year‘s best actor for "Life Is Beautiful," a Holocaust comic-tragedy that he wrote, directed and starred in. The film, an international hit, was also named best foreign film. It was the first time that an actor in a foreign language film won the best actor‘s prize. In 1961, Sophia Loren won the best actress Oscar for her performance in "Two Women.‘ Gwyneth Paltrow, the love interest in "Shakespeare in Love" was named best actress, becoming overnight a major Hollywood star at the tender age of 25. Steven Spielberg won the Oscar for best director for "Saving Private Ryan" but his film did not win the Oscar wars by being named best picture. It is rare for a film not to win both the best director and best film award. "Ryan" was the favourite for best picture, its chances boosted earlier this month when it won the top motion picture award from the Producers Guild of America. But Miramax, which made "Shakespeare in Love," helped its chances and created controversy by spending an estimated $2 million in ads targeted at Academy Awards voters. The producers of "Ryan" spent heavily as well — but it was clear from the vote that "Shakespeare" had the momentum. Benigni jumped for joy while Paltrow was reduced to tears as both gave the most dramatic acceptance speeches of the evening. By the time Benigni came up to the podium to accept his second award, he complained, "This is a terrible mistake because I used up all my English … Grazie all‘Italia. Grazie all‘America." Loren, an old Benigni friend, gave Benigni his award for best foreign language film, calling out "Roberto" across the Dorothy Chandler Pavilion. "Life Is Beautiful", portraying a Jewish father trying to shield his son from the horrors of a Nazi death camp, has won many international awards and also provoked controversy since the film‘s theme was that the human spirit could triumph in a place like Auschwitz. Another Holocaust film, "The Last Days," was named best documentary. It is about five people who survived the Holocaust in Hungary. Two veteran actors, James Coburn and Britain‘s Dame Judi Dench, won first-time Oscars for their supporting roles in two critically acclaimed films. Coburn, who until this year had never been nominated for an Oscar, looked shocked. "Shakespeare in Love" won seven awards: best picture best actress, best supporting actress, best original musical comedy score, best costumes, best original screenplay and best art direction. "Ryan" won five Oscars: best direction, cinematography, film editing, sound effects, and sound. "Life Is Beautiful" was third with three awards: best actor, best foreign film and best dramatic score. Prominent Hollywood actors like Nick Nolte and Ed Harris sat on their hands and refused to applaud when veteran director Elia Kazan was awarded a lifetime achievement Oscar. But most of the audience stood up and cheered for the director of such classics as "On the Waterfront" and "A Streetcar Named Desire" despite his role in naming Communists to the House Un-American Activities Committee during the years of the Hollywood blacklist. Kazan made no mention of the controversy in a brief acceptance speech. The 71st annual Academy Awards opened in grand style with its host, comedian Whoopi Goldberg dressed up in full regalia as Queen Elizabeth I in tribute to the two films involving the English monarch up for awards: "Elizabeth" and "Shakespeare in Love." Peppering her comments with four-letter expletives, she then launched into a parade of jokes that seemed to sum up all the controversies of the year from the White House sex scandal to the furore over Kazan.