Serbia's incumbent president, Boris Tadic, and nationalist opposition leader Tomislav Nikolic will contest the second round of presidential elections.
Nikolic won 25.6 per cent of votes in the first round, trailing Tadic who scored 26.8 per cent, estimates showed.
The perennial presidential candidate Nikolic also ran against Tadic in 2004 and 2008, losing twice in a run-off. "Now I am convinced I will win in the second round," Nikolic said on Sunday. The run-off vote will be held on May 20.
Sunday's vote was seen as a turning point for Serbia because for the first time in almost two decades the election focused on bread-and-butter economic issues rather than the wars that made the country an international pariah.
Tadic, who in his eight years of power managed to steer Belgrade back into the West's favour and secured EU-candidacy status in March, said the run-off would determine the country's future.
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"Our policies will speed up Serbia's path towards European integration," Tadic said, adding that he was convinced of a second-round victory.
"I expect even more support from citizens (in the run-off) ... because it is in their utmost interest: to lead them into the EU, to bring more investments, more regional co-operation".
In parliament, Nikolic's Serbian Progressive Party (SNS) became the biggest party with 24.7 per cent of the vote, according to CESID estimates. However, the difference with Tadic's Democratic Party (DS), which got 23.2 per cent, was not as big as predicted before the vote.
Analysts said the SNS was able to cash in on voter discontent over low wages and record unemployment in the poor Balkans country. With neither party having an absolute majority they will have to put together a coalition government. But the results give the kingmaker role to the Socialists (SPS).
Founded by late strongman Slobodan Milosevic, the SPS doubled its parliamentary presence with 16.6 per cent of the vote to become the third biggest party.
Results released by Serbia's electoral commission RIK - based on just 7.8 per cent of the votes counted at over 8,000 polling stations - confirmed the trends in the CESID parliamentary figures.
They also confirmed that it would be Nikolic and Tadic who face each other in a presidential run-off.
"We have to be proud of the electoral result," Nikolic told supporters at his party's headquarters.
"The party, in three and a half years of existence, has won most of the votes in Serbia," he said.
"From tomorrow I want to start talks about (forming) a new government of Serbia ... we have no time to lose." Nikolic, who has twice been beaten by Tadic in a presidential run-off, was in a combative mood on Sunday. "Now I am convinced I will win in the second round," he said.
SPS leader Ivica Dacic, who has pushed the party away from Milosevic's legacy, revelled in his win. "We still don't know who will be president, but we know for sure who will be the prime minister," he said, referring to himself.
He told his party faithful that he would first talk with Tadic's DS, with whom he has been in the ruling coalition for the past four years.
And since Dacic also got 15.3 per cent of the presidential vote on Sunday, his endorsement for the second round could be decisive for either candidate. The electoral commission has until Thursday to publish the final results of the vote.
