The party of Pakistan's late former PM Benazir Bhutto - the biggest winner in Monday's election - says it is ready to form a coalition with the PML-N party.
Supporters of Ms Bhutto's party have been celebrating in the streets
A union of Ms Bhutto's Pakistan People's Party (PPP) with the PML-N of another former PM, Nawaz Sharif, would have more than half parliament's seats.
The main party backing President Pervez Musharraf suffered heavy defeats.
The president's position has never looked more precarious, the BBC's Chris Morris in Islamabad says.
If a new governing coalition manages to muster a two-thirds majority in parliament, it could call for Mr Musharraf to be impeached.
Mr Musharraf was re-elected to the presidency last October, in a vote boycotted by the opposition as unconstitutional.
NATIONAL RESULTS SO FAR
PPP (Bhutto's party) : 87
PML-N (Nawaz Sharif): 66
PML-Q: (pro-Musharraf) 38
MQM (Sindh-based): 19
ANP (Secular Pashtuns): 10
Source: Geo TV
He has been a major US ally in the "war on terror" but his popularity has waned at home amid accusations of authoritarianism and incompetence.
The US State Department described Monday's election as a "step toward the full restoration of democracy".
'End of dictatorship'
At a press conference on Tuesday, Ms Bhutto's widower and the PPP leader, Asif Ali Zardari, said his party would "form a government of national consensus which will take along every democratic force".
"For now, the decision of the party is that we are not interested in any of those people who are part and parcel of the last government," he said, seemingly ruling out any coalition with the Pakistan Muslim League's pro-Musharraf wing, the PML-Q.
The PPP has won 87 seats so far, according to the website of private TV network, Geo.
The PML-N, or Pakistani Muslim League-Nawaz, is in second place with 66 seats so far.
Mr Sharif said earlier on Tuesday that he was prepared to discuss joining a coalition with Mr Zardari's party in order "to rid Pakistan of dictatorship forever".
The two parties so far have a combined total of 153 seats in the 272-seat parliament.
President Pervez Musharraf main parliamentary ally, the PML-Q, has already admitted defeat.
The party has come a distant third, with 38 seats so far.
PML-Q chairman, Chaudhry Shujaat Hussain, told Associated Press Television News his party accepted the results "with an open heart" and was prepared to "sit on opposition benches".
HAVE YOUR SAY
Perhaps Musharraf should leave Pakistan so that reforms can begin
Mr Musharraf, who seized power in a bloodless coup in 1999, stepped down as army chief last year, at the urging of his foreign allies.
The parliamentary election has been seen as a key milestone in Pakistan's transition from military to civilian rule.
The election was preceded by months of violence, including the suicide attack that killed PPP leader, Ms Bhutto, in December.
The poll was initially scheduled for early January but was delayed after her assassination.
Pakistan's military has been trying to contain a Taleban-influenced Islamist insurgency along the country's rugged frontier with Afghanistan.