The narrow margin – 91 seats for Ayad Allawi's coalition to 89 for Mr Maliki's alliance – sets the stage for months of political wrangling, as the veterans of Iraq's young democracy attempt to win support for a majority coalition.

The results were based on numbers released by the election commission.

Within minutes of the results being released, Mr Maliki appeared on a nationally televised news conference and announced he would not accept the results.

Mr Maliki, who appeared with supporters lined up behind him, said he would challenge the results through what he described as legal process.

The vote totals were released within hours of a twin bombing near a restaurant in a city north of Baghdad that killed at least 40 people, highlighting the violence many Iraqis fear could mar the post-election process, as both sides scramble to forge enough alliances to assemble a governing coalition.

The top official for the United Nations in Iraq, Ad Melkert, said the UN believed the country's parliamentary elections on 7 March were credible and called on all sides to accept the results.

That sentiment was echoed by US ambassador Christopher Hill and General Ray Odierno, the top US military official in Iraq, who praised what they described as a "historic electoral process", and said they supported the finding of election observers, who said there was no evidence of widespread or serious fraud.

Mr Maliki and his supporters in the State of Law coalition have previously called for a recount, amid claims of vote-rigging and fraud, but election officials refused.

The prime minister, who is fighting for a second four-year term, has widespread support from Iraq's Shiite majority, but has tried to distance himself from his sectarian roots and portray himself as a nationalist who helped to return stability to Iraq after years of violence.

But his support for a ban of hundreds of candidates with alleged ties to Saddam Hussein's regime severely undercut any support he had from Sunnis, who felt the ban unfairly targeted their candidates.

Many Sunnis, instead, threw their weight behind Mr Allawi, a secular Shiite who has built a broad coalition drawn from both Islamic sects.

Mr Allawi, who served as prime minister from 2004 to 2005, has used his anti-Iran rhetoric to appeal to Sunnis, who are wary of Tehran's influence with their Shiite-majority government.

The results showed the Iraqi National Alliance, a Shiite bloc with close ties to Iran, in third place with 70 seats. The INA, an alliance that includes the anti-American cleric Moqtada al-Sadr, is negotiating a merger with Mr Maliki's State of Law.

The tight race has set the stage for protracted manoeuvrings over forming a new government that could spark new fighting and complicate American efforts to speed up troop withdrawals in the coming months.

Yesterday's blasts underscored the security risks that remain in Iraq. The two bombs exploded near a popular restaurant in Khalis, a town 50 miles north of Baghdad, injuring dozens of people, said Major Ghalib Al-Karkhi, the police spokesman in Diyala province.

The bloc that wins the most seats gets the first stab at choosing the prime minister and forming the new government, which will run the country as US forces decrease from their current level of about 95,000 to 50,000 by the end of August.