The ruling party in East Timor, Fretilin, has claimed victory in last weekend's elections, although its support has slipped to 29% of voters.
The figures represent almost complete results
In the last election in 2001, Fretilin won 57%, and now it will need to find coalition partners if it wants to rule.
The Fretilin leader, Mari Alkatiri, said talks were taking place with several other parties.
But he ruled out any deal with the party of the former president, Xanana Gusmao, which polled 23%.
Most parties have said they will not join a Fretilin coalition, and analysts say that one likely outcome would be a government formed around Mr Gusmao's party, under which Mr Gusmao ends up as prime minister.
Correspondents say the slide in support for Fretilin was largely due to popular anger at the slow pace of development since independence.
Violence and accusations
Results are now almost complete after Saturday's parliamentary election.
More than 500,000 votes were cast in the poll, which was declared generally free and fair by European Union election monitors.
Fretilin and Mr Gusmao's National Congress for the Reconstruction of East Timor (CNRT) have dominated the election for the 65-seat parliament.
Twelve other smaller parties also put up candidates in the election.
A fragile peace has existed in the impoverished country since violent feuding between rival units in the fledgling army and police forces spilled onto the streets in 2006.
Alkatiri resigned as PM in the wake of last year's violence
The clashes left more than 30 people dead, forced tens of thousands of people from their homes and led to the deployment of an international peacekeeping force.
Mr Alkatiri - who was forced to resign after last year's violence - has accused Mr Gusmao of authoritarian tendencies.
But Mr Gusmao used his campaign to tell supporters that Mr Alkatiri had already tried - and failed - to run a successful administration.
Parliamentary elections come a month after former Prime Minister Jose Ramos-Horta was elected president, vowing to end violence in the young nation.
Mr Gusmao chose not to seek a fresh term as president - a largely ceremonial role - preferring to seek the job of prime minister.
The former Portuguese colony of East Timor broke away from 25 years of Indonesian rule in a 1999 referendum. It was placed under UN protection until it achieved independence in May 2002.