This paper presents an integrated traffic engineering (TE) system for new generation multilayer networks based on the generalized multiprotocol label switching (GMPLS) paradigm, and reports the performance analysis of such a system. The proposed TE system aims at dynamically reacting to traffic changes and, at the same time, fulfilling quality of service (QoS) requirements for different classes of service. The proposed solution consists of a hybrid routing approach and a bandwidth management strategy. The former makes use of both off-line and on-line methods to accommodate traffic requests. The latter, based on an "elastic" use of the bandwidth, allows the handling of different priorities among data flows, possible preemptions, and rerouting. The proposed TE permits the accommodation of the largest amount of traffic, while guaranteeing good performance to mission-critical services. The main building blocks and the operations of the system are reported and the major advantages are discussed. The performance of the proposed system are compared with the ones relating to a reasonable alternative system based on overprovisioning, to highlight its advantages of in terms of traffic volume that can be accommodated for a given network infrastructure.