Australian Prime Minister Julia Gillard of the Labor Party casts her vote at the Seabrook Primary School in Melbourne on Saturday. (Mark Graham/Associated Press)

Australian Prime Minister Julia Gillard said she started negotiating with Independent legislators Sunday in a bid to cling to power because no major party won a majority of parliamentary seats in the country's general election.

Gillard said she hoped to enlist support for her centre-left Labor Party and has held preliminary talks with three Independents in the House of Representatives, as well as an Independent candidate whose seat is not yet assured and a legislator from the Greens party.

Both the centre-left Labor, which ruled for the past three years, and the Opposition coalition led by the conservative Liberal Party, have conceded that neither is likely to claim the 76 seats needed to form a government in the 150-seat House of Representatives.

"It is clear that neither party has earned the right to government in its own right," Gillard told reporters. "It's my intention to negotiate in good faith an effective agreement to form government."

An Australian government has not had to rely on the support of Independents to rule since 1942.

The results from Saturday's election were expected to be the closest since 1961, when a Liberal government retained power with a single seat.

With 78 per cent of the vote counted, the Australian Electoral Commission said Labor had won 70 seats — one less than earlier calculated — and the coalition 71. Most analysts agreed that the coalition was likely to finish with 73 and a single seat advantage over Labor.

Deputy Prime Minister Wayne Swan said it will take days of counting before it's clear who could form a government.

"It's very close. I think it's just too early to come to that conclusion," Swan told Australian Broadcasting Corporation television, referring to the possibility that his centre-left Labor Party had lost the government.

Australians have not dumped a first-term government since 1931 when a Labor administration paid the ultimate price for the Great Depression.

However, this year's elections are coloured by Gillard's surprise seizure of the helm of her party from former prime minister Kevin Rudd, a coup that took place in June after a series of poor opinion polls.

Health care, asylum seekers, climate change issues

Issues varied across the large and diverse country, but asylum seekers, health care and climate change were hot topics during the campaign. Another issue brought to the forefront in Saturday's vote was the presence of the Australian military in Afghanistan, where two soldiers were killed the day before.

The government and opposition both support Australia's military commitment to Afghanistan, where 20 Australian troops have now died. Gillard and Liberal Leader Tony Abbott both sent their condolences to the families and praised the sacrifice of the soldiers.

Abbott, whose socially conservative views alienate many female voters but whose supporters say he can better empathize with Australian families, is his party's third choice as leader since prime minister John Howard led it to defeat in 2007.

Abbott beat his predecessor by a single vote last December in a party ballot. Long seen as a gaffe-prone fitness enthusiast who is often lampooned in the media over the many images of him clad in cycling and swimming wear, he is likely to win away the prime ministership from Gillard, one analyst said.

Norman Abjorensen, an Australian National University political scientist, said the most likely outcome would be an unstable minority government under Abbott, supported by three Independents.