Both sides claim victory

State media declared President Mahmoud Ahmadinejad the winner of Iran's election yesterday, but challenger Mirhossein Mousavi alleged irregularities and claimed victory for himself.

The head of the state election commission said Mr Ahmadinejad was leading Mr Mousavi by 69 per cent to 28 per cent with about 19 per cent of ballots counted.

The official news agency Irna said: "Dr Ahmadinejad, by winning most votes at the 10th presidential election, has secured his victory."

Mr Mousavi had earlier tried to pre-empt official announcements by calling a news conference at which he alleged there had been irregularities, including a shortage of ballot papers.

"I am the definite winner of this presidential election," he declared.

There was no immediate response from Mr Mousavi to the election commission's figures.

A bitterly fought campaign has generated intense excitement inside Iran and provoked strong interest around the world, with policymakers looking for signs of a change of approach by Tehran, whose ties with the West worsened under Mr Ahmadinejad.

A victory for Mr Mousavi could help ease tensions with the West, which is concerned about Tehran's nuclear ambitions, and improve chances of engagement with US President Barack Obama, who has talked about a new start in ties with Tehran.

Mr Mousavi, a former prime minister, said many people had not been able to cast their ballots even after voting was extended by four hours.

Earlier, in Washington, Mr Obama said his administration was excited about the debate taking place in Iran and he hoped it would help the two countries to engage "in new ways".

Mr Mousavi, at his news conference, listed problems with the voting process.

"(We) are waiting for the counting of votes to officially end and explanations of these irregularities to be given," Mr Mousavi said. "We expect to celebrate with people soon."

"We hope that authorities in charge do their work in this regard with the wisdom of the supreme leader. This issue would end in a good way."

Under the election rules, if no candidate wins 50 per cent of the votes, a run-off will be held on June 19 between the two front-runners.

Long queues had formed at voting centres, both in northern, affluent areas of Tehran where Mr Mousavi draws support and in southern, poorer neighbourhoods seen as Ahmadinejad strongholds.

High turnout could indicate voting by many pro-reformers who stayed away when Mr Ahmadinejad won four years ago on a pledge to revive the values of the 1979 Islamic Revolution. Political analysts have said they expect a close race.

For Iranians it is a chance to pass judgment on his management of the Islamic Republic's oil exporting economy.

Although Mr Ahmadinejad, 52, says his government has revived economic growth and curbed price rises, inflation and high unemployment were the main campaign issues. Official inflation is around 15 per cent.

Social issues, such as strict dress codes for women, as well as Iran's ties with the outside world, also featured in the campaign but the outcome of the vote will not bring a major shift in Iran's foreign policy, which is determined by Supreme Leader Ayatollah Ali Khamenei.