Australians chose Saturday between giving their first female prime minister her own election mandate and returning to a conservative government after just three years. With more than 75 percent of the votes counted, the results were too close to call.
Prime Minister Julia Gillard said she will remain the caretaker leader and hoped to form the next government.
"Obviously this is too close to call. There are many seats where the result is undecided and where it will take a number of days of counting to determine the result," she said.
She acknowledged her opponent, conservative Liberal Party leader Tony Abbott, was "a formidable advocate for his side of politics."
A record number of votes cast for independents and Australian Greens party candidates could decide the outcome, with the possibility growing that the mainstream parties will need to strike a deal with fringe groups to form a government. Such a coalition would be the first in almost 70 years.
Analyst Norman Abjorensen, an Australian National University political scientist, said the most likely outcome was an unstable minority government led by Abbott and supported by independents.
The results were the closest since 1961, when a Liberal government retained power with a single seat.
Gillard, a cheerfully charismatic and sharp-witted 48-year-old former lawyer, came to power in a June 24 internal coup in her center-left Labor party during the first term of her predecessor, and almost immediately called elections to confirm her mandate.
Abbott, a married 52-year-old former Roman Catholic seminarian with three daughters, barely gained the endorsement eight months ago of his Liberal Party, which has led Australia for most of the last 60 years.
Australians have not dumped a first-term government since 1931 when a Labor administration paid the ultimate price for the Great Depression. However, this year's elections are colored by Gillard's surprise seizure of the helm of her party from former Prime Minister Kevin Rudd after a series of poor opinion polls.
Gillard, a Welsh-born immigrant who has a common-law hairdresser spouse, had acknowledged before polls closed that Labor could lose its entire eight-seat majority in the 150-seat House of Representatives. Labor won 83 seats in the last elections in 2007.
Issues vary across the large and diverse country, but asylum seekers, health care and climate change are hot topics nationwide. Another issue brought to the forefront Saturday was the presence of the Australian military in Afghanistan, where two soldiers were killed the day before. The government and opposition both support Australia's military commitment to Afghanistan, where 20 Australian troops have now died.
Gillard and Abbott both sent their condolences to the families and praised the sacrifice of the soldiers.
The decision by Labor power-brokers to support Gillard — widely regarded as a better communicator than Rudd — cost the party the traditional incumbent's advantage.
One of those power-brokers, Paul Howse, said the decision was correct despite the loss of Labor votes Saturday.
"I think the parliamentary party made the right decision," Howse told Australian Broadcasting Corp. television. "Labor would have in fact done worse under a different leadership."
Abbott, whose socially conservative views alienate many women voters but whose supporters say he can better empathize with Australian families, is his party's third choice as leader since Prime Minister John Howard led it to defeat in 2007. Abbott beat his predecessor by a single vote last December in a party ballot.
Abbott has long been seen as a gaffe-prone fitness enthusiast who is often lampooned in the media over the many images of him clad in Lycra cycling and swimming wear.