Gusmao's party wins most votes in East Timor election

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The party of East Timor independence hero Xanana Gusmao has won the most votes in a parliamentary election, preliminary results showed, boosting his chances of his return as prime minister.

Gusmao's National Congress for Timorese Reconstruction (CNRT) won about 42 per cent of ballots cast with 100 per cent of the votes counted, according to election commission data carried by state broadcaster Radio-Televisao Timor Leste.

Reuters could not reach the election commission for confirmation on Tuesday.

The Revolution Front for an Independent Timor-Leste (FRETILIN), the party of Prime Minister Jose Maria Vasconcelos, popularly known as Taur Matan Ruak, was second with about 26 per cent of the votes, with the rest split among 15 parties.

Sunday's contest was the fifth parliamentary election since East Timor, a country of 1.3 million people that gained full independence in 2002 after a quarter-century rule by neighbouring Indonesia.

The former Portuguese colony must now wait to see who will be chosen as prime minister by the newly formed legislature.

The election had been billed as a battle of two former resistance figures, CNRT's Gusmao, 76, and FRETILIN's Mari Alkatiri, 73, with Gusmao seen by analysts as the favourite.

Heavily dependent on its fast-depleting oil reserves for revenue, the half-island nation faces a challenge with poverty and diversifying its economy, which at $US3.6 billion ($A5.4 billion) is one of Asia's smallest.

East Timor's election follows last year's victory in a presidential ballot for independence leader and Nobel laureate Jose Ramos-Horta, also of the CNRT party.

Gusmao, a former guerrilla leader, was East Timor's first president and served as prime minister from 2007 until his resignation from the post in 2015.