Croatia's political parties have faced tough negotiations to cobble together a government after the conservative opposition won a narrow election victory.
The win has heightened uncertainty in a country battling the migration crisis and recession.
The tight result means it could take weeks of horse-trading to cobble together a new government following the country's first election since joining the European Union.
The new government will be under pressure to push through reforms in a country slowly emerging from six years of recession and grappling with the transit of tens of thousands of migrants.
Results after nearly 99 percent of votes were counted showed the opposition Patriotic Coalition, led by the HDZ party, taking 59 seats in the 151-seat parliament – just three more than the centre-left bloc, led by the Social Democrats (SDP), which has ruled for the past four years.
With no outright majority, new political party Most ("Bridge" in Croatian), emerged as a powerful force in national politics, coming third with 19 seats, but its leader repeated a pre-electoral pledge that his party would not enter a coalition.
"Across the Bridge to a new government," declared the front-page headline on largest circulating newspaper, Vecernji list, while the influential daily Jutarnji list said: "Most decides on a new government".
According to the constitution, the president must consult parliamentary parties and nominate a prime minister-designate who has the support of the majority of MPs.
With 70 percent of votes counted in the early hours, HDZ leader and ex-spy chief Tomislav Karamarko toasted success and declared victory to his supporters.
"We won the parliamentary elections ... The victory brought us responsibility to lead our country, which is in a difficult situation," he told cheering fans.
But the latest tally makes the outcome more complicated, increasing the possibility that the SDP, despite winning fewer seats, could unite with smaller parties to try to form a government.
Defiant Prime Minister Zoran Milanovic of the SDP called on Most to form a coalition with his centre-left bloc as the results came in, telling his supporters: "We cannot go it alone and we need partners".
Croatia is the newest member of the European Union, having joined in 2013, and it remains one of the bloc's poorest-performing economies.