In the first election since Islamic State (IS, formerly ISIS) was defeated in the country, Shiite militia chief Hadi al-Amiri's bloc, which is backed by Iran, was in second place.
Nationalist Shi'ite Cleric Moqtada al Sadr took a surprise lead in Iraq's elections by tapping into public resentment with Iran and what some voters say is a corrupt political elite it supports, APA reports quoting Reuters. However, ahead of Saturday's national election, he distanced himself from Iran.
Instead of choosing Abadi's list voters apparently either opted to stay home - with turnout at a record low of 44.5 percent - or opt for candidates who portrayed themselves as anti-establishment.
Among the traditional powerbrokers looking set to lose big at the election was divisive former premier Nuri al-Maliki, who remains widely reviled for the loss of territory to IS.
But his spokesman said Sadr supports honoring commitments between Iraq and the United States concerning the training of Iraq's security forces and weapons purchases as long as they serve Iraq's interests and there "is no interference on the sovereignty of Iraq".
The Iraqi Independent High Electoral Commission (IHEC) had announced the elections results of 10 Iraqi provinces on Sunday night where influential Shia cleric Muqtada al-Sadr appeared to be leading the polls.
Abadi placed first in Iraq's second largest province, Nineveh, but he performed poorly in the rest of the country, coming in third and fourth place in most provinces, and fifth in Baghdad. Iraq's many political factions mean a government may only be formed after drawn out negotiations.
He congratulated the people of Iraq and all the winning and leading lists in the elections process, expressing his full readiness "to work and cooperate to build and form the strongest Iraqi government".
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Forty-four year old Sadr will not become prime minister as he did not run in the election but his nearly certain victory puts him in a position to pick someone for the job. Authorities are seeking as much as $88 billion for postwar reconstruction.
A document being circulated among journalists and analysts by a candidate in Baghdad showed Sadr had won the nationwide popular vote with over 1.3 million votes, followed by Amiri with over 1.2 million and Abadi with over 1 million.
The election came as Iraq is struggling to bring down soaring unemployment and reintegrate its disenfranchised Sunni minority.
But the defeat of Islamic State and Abadi's campaign to eradicate Iraq's rampant corruption improved his standing. His father, highly respected Grand Ayatollah Mohammed Sadeq al-Sadr, was killed in 1999 for defying Saddam Hussein. Whoever wins the most seats must negotiate a coalition government in order to have a majority in parliament.
Political power in Iraq is traditionally divided along sectarian lines among the offices of prime minister, president and parliament speaker.
The Iraqi elections also serve as a battleground for the US and Iran, with Tehran continuing to wield significant influence over Baghdad.
Abadi was seen by some Iraqis as lacking charisma and ineffective.