Spain's centre-right People's Party has won the country's general election, and claimed the right to govern, acting Prime Minister Mariano Rajoy told cheering supporters  last night.

The PP won 137 seats, up from 123 in a previous election in December, but short of the 176 needed for an outright majority.

Spain now enters another round of backroom talks to see which parties can form a governing coalition, a task that eluded them despite months of negotiations following the December vote.

"You have won the election because you have had faith in victory and because you have pursued it," Rajoy said from the balcony of his party's headquarters in Madrid.

"We claim the right to govern, precisely because we have won the elections, but right now our aim is to be useful to the entire population, those who voted for us, and those who didn't vote for us. We are at your service."

Options to form a government include a centre-right pact between the PP and liberal newcomer Ciudadanos, a German-style grand coalition between the PP and the Socialists, or even a minority PP administration.

"From tomorrow, we will have to start speaking to everyone, and that's what we'll do. Long live Spain. And we are going to talk, with the sole aim of defending Spain, and every Spaniard. This is what we're here for," said Rajoy.

After six months of political deadlock, celebrating PP supporters hoped for more successful negotiations this time around.

"I think we have to negotiate, and we have to give way to new ideas as well, to unite us for the benefit of Spain," said Francisco Gasset.

"In truth, it's going to be complicated," said another PP supporter, Javier Grijota. "The PP is the winning party, it deserves it - after everything that's happening in Europe, Mariano Rajoy has recovered the confidence of the people. And sincerely I hope that these results serve to keep the PP in power," he added.

Upstart liberal party Ciudadanos, which saw its support fall on Sunday, said it was ready to immediately open talks with the PP to explore the formation of a government.

The two combined would fall just seven seats short of a majority, putting pressure on the Socialists to drop their opposition to a PP-led government.

Socialist leader Pedro Sanchez said he would put his party "at the service of the general interest" but an agreement with the PP might not be easily reached. 

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