[b Social Democrat Prime Minister Johanna Sigurdardottir has claimed victory in Iceland's election, held after the previous conservative-led government was toppled following street protests over an economic meltdown.
With 42% of votes counted, a state TV projection showed her Social Democrat/Left-Green caretaker government that stepped in after the old administration fell would win 35 seats, a majority of four in the 63-seat parliament.
The results from Saturday's election were set to put the pro-European Union Social Democrats in the driving seat of the centre-left coalition, though it must find a compromise with the anti-EU Left-Greens on starting entry talks with the bloc.
Ms Sigurdardottir, 66, who is convinced she can find such a compromise, has said Iceland should quickly start talks and then eventually hold a referendum on EU entry.
Voters punished the centre-right Independence Party, which led the previous coalition government that surrendered power in January over blame for last year's crisis in which the economy imploded as banks collapsed under a weight of vast debts.
The television projection gave the Independence Party 15 seats, down from 25 at the last election in 2007.