With a gap of just over a percentage point between the top parties, recounts have been demanded. Prime Minister Enda Kenny's chance of survival is limited after nationalist party Sinn Fein ruled out a deal.
As counting resumed on Sunday, Kenny's right-wing Fine Gael was on course to be slightly ahead of the opposition, Fianna Fail. Though both parties are considered to be politically right-wing, long-standing disagreements have made a partnership between the two unlikely, at least until all other options have been exhausted.
But with Kenny, who is the current taoiseach (prime minister) conceding that his existing coalition with junior party Labour has failed to secure a return to office - and after the nationalist Sinn Fein ruled out a deal with either Fine Gael or Fianna Fail - the unthinakble option is now a distinct possibility.
Historic deal mooted
A grand coalition between the two age-old foes would probably require the support of several independent candidates and smaller parties, who had a very successful election, achieving a combined 29 percent so far.
With 95 seats filled, Fine Gael was on 25.5 percent, Fianna Fail was at 24.4 percent and republican Sinn Fein was at 13.9 percent. The two leading parties remain neck and neck with 28 seats each.
Labour dropped sharply to 6.6 percent from 19.4 in the 2011 election, and analysts said they would struggle to get the 7 seats needed to operate fully in the Dail, Ireland's lower house of parliament.
But will it work?
Skepticism about whether Fianna Fail and Fine Gael could work together was summed up best by a cartoon in Sunday's edition of the Irish Independent.
In it, a reporter asks the Fine Gael and Fianna Fail leaders: "What next?" Prime Minister Enda Kenny replies: "Stable chaos." Whereas Finna Fail leader Micheal Martin answers: "Chaotic stability.'"
Fine Gael and Fianna Fail have never shared power in the 94 years since Ireland won independence from Britain. But neither side has ruled out forming a partnership if government stability requires this in Ireland's increasingly fractured political landscape. Analysts believe a grand coalition could take weeks to organize due to the longstanding rivalries.
"There's a sense of bewilderment first of all. We're a long way from sitting down together and talking about what our next options are," said Regina Doherty, a re-elected lawmaker for Meath northwest of Dublin.
Meanwhile, current Finance Minister Michael Noonan has fueled speculation of a second election later this year to try to break a looming political deadlock.
"We may all be back here again very shortly," Noonan said, speaking inside an election count center on Sunday.
Turnout for Friday's poll was 65 percent, 5 percentage points down on the last election in 2011.
Under Ireland's electoral system of proportional representation, in which voters list candidates in order of preference, counting can take a long time.
Electoral officials expect nearly all winners in the 158-member parliament to be declared by Sunday night.
The new parliament is scheduled to convene March 10 to elect a prime minister.
mm/jlw (AFP, AP, dpa)