Observation of b --> d gamma and Determination of |V_td/V_ts|

We report the observation of the flavor-changing neutral current process b --> d gamma using a sample of 386*10^6 B meson pairs accumulated by the Belle detector at the KEKB e+ e- collider. We measure branching fractions for the exclusive modes B- --> rho- gamma, B0bar --> rho0 gammaand B0bar --> omega gamma. Assuming that these three modes are related by isospin, we find Br(B --> (rho,omega) gamma) = (1.32 +0.34-0.31(stat.) +0.10-0.09(syst.)) * 10^-6 with a significance of 5.1 sigma. This result is used to determine the ratio of CKM matrix elements |V_td/V_ts| to be 0.199 +0.026-0.025(exp.) +0.018-0.015(theo.).