Close finish in Croatia election

Croatia's ruling conservative party, the Croatian Democratic Union (HDZ), has a narrow lead with most votes counted after the general election.

The electoral commission said the HDZ would have around 60 MPs - three more than the opposition Social Democrats.

Both parties are wooing potential coalition partners, in an effort to secure the parliamentary majority of 77 seats necessary to govern.

President Stipe Mesic has to decide who has the best chance of governing.

The main campaign issues were corruption, the economy, and reforms needed to take Croatia into the EU.

Both the main parties are committed to completing Croatia's entry into the European Union, which they hope to achieve by 2010, although the EU has warned them to do more to tackle corruption.

Voters in more than 50 countries took part, as a significant proportion of the electorate - 400,000 people - lives abroad.

Analysts say the diaspora vote could swing the result in favour of the HDZ.

"The Croatian Democratic Union's (HDZ's) victory is certain... Croatian voters have shown that they trust the HDZ and the policies we've been implementing in the last four years," said Prime Minister Ivo Sanader.

His opponent, Social Democrat leader Zoran Milanovic, was also confident of victory.

"We are immediately starting talks for forming the new government and I am sure we shall succeed," he said.