East Timor's main opposition party leads in parliamentary poll - state media

(Reuters) - East Timor independence hero Xanana Gusmão's party was leading with two-thirds of votes counted in a parliamentary election, state media showed on Monday, heralding a possible return to power for the former rebel after nearly a decade in opposition.

Sunday's election, which will pave the way for the winning party or a coalition of parties to appoint the head of government, is a battle for the premiership between Gusmão and Mari Alkatiri, another resistance-era figure from the ruling party.

With nearly 70% of ballots counted, Gusmão's opposition party, the National Congress for Timorese Reconstruction (CNRT), had about 40% of votes, according to election commission data as broadcast by state media Radio-Televisão Timor Leste.

The ruling Revolutionary Front for an Independent Timor-Leste (FRETILIN), which leads a four-party coalition backing the incumbent prime minister José Maria Vasconcelos, or Taur Matan Ruak, had about 27% of votes.

Fifteen other parties were contesting the poll, though none had more than 10% of votes as of Monday.

Reuters could not independently verify the results.

The election is East Timor's fifth parliamentary poll since it gained full independence in 2002 following decades-long occupation by Indonesia.

Heavily dependant on its fast-depleting oil reserves for revenue, the half-island nation of 1.3 million people has grappled with diversifying its economy and reducing high rates of poverty.

(Reporting by Stanley Widianto; Editing by Kanupriya Kapoor)