Nepali Congress (NC) won 101 seats while the CPN-UML bagged 89 out of the 231 directly elected seats for which results have been declared so far.
The Unified CPN-Maoist was trailing far behind in third position with 24 seats. Other fringe parties won 17 seats.
With only nine results for the directly elected seats yet to be announced, NC appeared set to emerge as the party with most seats in this category.
A party needs a total of 301 seats to get an absolute majority.
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After suffering a humiliating defeat in a constituency in Kathmandu, where he finished third, UCPN-Maoist chief Prachanda was today elected from a seat in Siraha in southern Nepal by a margin of just 900 votes. He secured 15,244 votes to defeat his nearest rival Lila Shrestha of CPN-UML.
Maoists have threatened to boycott the assembly, alleging a conspiracy.
Senior leaders Baburam Bhattarai and Narayankaji Shrestha did not agree with Prachanda's stance, the sources said.
"I still believe that the agenda put forth by the UCPN-Maoist regarding the progressive transformation of the state and economic prosperity still holds true," Bhattarai said.
Among the smaller parties, the Madhesi Peoples Rights Forum-Democratic and Terai Madhes Democratic Party won four constituencies each while the Rastriya Prajatantra Party bagged three seats.
Madhesi Peoples Rights Forum-Nepal won two seats while three fringe parties and an independent candidate claimed one constituency each.