Taoiseach (Irish prime minister) Enda Kenny has conceded that the existing Fine Gael-Labour coalition government will not be returned in the Republic of Ireland general election.
It is likely Fine Gael will remain the largest party, but with a narrow lead over the main opposition, Fianna Fáil.
Just over a third of the seats for the Dáil (Irish parliament) have been filled.
Polls show Sinn Féin, smaller parties and Independents are also doing well.
Mr Kenny, Labour Party leader Joan Burton and Sinn Féin deputy leader Mary-Lou McDonald have all retained their seats.
However, Fine Gael's former justice minister Alan Shatter and Alex White, the Labour Party's communications minister, have not been returned to parliament.
Enda Kenny said the election was a 'disappointment' for Fine Gael
Mr Kenny said the voting showed that the existing government will not regain power.
"This is a disappointment for the Fine Gael party," he said. "Obviously whether you can argue about the people's decision, you cannot argue with it.
"So clearly, the government of Fine Gael and Labour are not going to be returned to office."
He added that the "majority government option is gone" but he will wait for the full results and consider options on how to form a government "very carefully".
"Clearly the country needs a government and must have one," he said.
Joan Burton said she was "very, very disappointed" that many Labour Party candidates would not be elected to parliament.
"All I can say is that the Labour Party is at the fight for justice and social justice in Ireland and we will continue that fight in the next Dáil, even if our numbers are diminished."
When asked about how a government will be formed, she said that all parliamentary members would have to "work to do whatever is best for the people of our country".
Fianna Fáil leader Micheál Martin described the election as an "extraordinary vote" and said he was "very pleased".
"A lot will depend on the destination of the last seats in many constituencies, it's a bit too early to be definitive, but it's clear we're going to have a good day," he said.
Sinn Féin deputy leader Mary-Lou McDonald said that she expects the party will be putting leader Gerry Adams forward to be the next taoiseach.
"It's early in the day but I think if this election demonstrates anything, it is that there is now, or should be, no sense from Fine Gael and Fianna Fáil that they have some divine right to govern - they don't," she said
Many believe the expected result could make negotiations on forming a new government extremely difficult.
However, pressure is expected to mount on them to come to some form of arrangement that may take several weeks to arrive at.
If borne out by the count, the vote shares would result in a hung Dáil (parliament), but with Fine Gael still taking the largest number of seats.
Irish election facts
Over three million people were entitled to vote in Friday's poll, that will return 157 members of parliament, known as TDs. The ceann comhairle (speaker) is automatically returned.
Although the election count is a long and gruelling process, there have been some lighter moments including a silver eternity ring that was found in a ballot box and one voter who gave his number one to UFC champion Conor McGregor.
Meanwhile, one person swapped the Oscars in Hollywood for a count centre in County Cavan in order to support a politician.
Eamon Farrell, the brother of actor Colin Farrell, had a ticket for the star-studded ceremony but decided instead to travel to the count centre in order to show his backing for Arts Minister Heather Humphries.
The election campaign was fought mainly over economic issues, with the government parties asking voters for their support to keep the recovery going at a time when international storm clouds are gathering.
But the opposition parties countered that not everyone, especially outside of middle-class Dublin, is yet benefiting from the up-turn.
The Republic of Ireland has had the biggest growing economy in the eurozone for the last two years.
TDs will be elected according to the single transferable vote (STV) system, in which candidates have to reach a quota, before their surplus votes are distributed to others.