Conservatives seen as critics of Ahmadinejad won a substantial bloc in the legislature, while reformists appeared likely to at least retain the small bloc they held in the outgoing parliament.
The election is seen as a crucial test for Ahmadinejad in advance of next year's presidential poll.
With more than 65 percent of the parliament's 290 seats decided, the pro-Ahmadinejad hard-line conservatives have taken 67 seats, while conservative critics of Ahmadinejad seized 46.
According to individual results announced by state television and the official news agency IRNA, reformists won 30 seats. Another 42 winners are independents whose political leanings were not immediately known.
Radio Farda reports that Iran's clerical leaders cheered the vote, which preserves the lock conservatives have had on the parliament since 2004.
Reformist leaders said that at least 14 winning independents are pro-reform, bringing their bloc to 44 seats so far. If correct, that would be around the size of the reformist presence in the outgoing parliament.
AP says several dozen seats, where no candidate won enough vote to secure victory, will be decided by second-round runoffs set for April.
Voter Turnout Up
The Interior Ministry reports voter turnout was about 60 percent of Iran's 44 million eligible voters -- up significantly from the 51 percent who voted in the 2004 election.
Iran's supreme leader, Ayatollah Ali Khamenei, thanked Iranians for their participation, saying they had turned U.S. attempts to discredit the vote "into a vain bubble."
At a news conference in Tehran today, Foreign Ministry spokesman Mohammad Ali Hosseini echoed Khamenei's comments.
"Regardless of the attempts made by the American and the Western media to put people off voting and take away their hopes for the elections, regardless of their schemes, nothing came to fruition and as ever, we witnessed an immense turnout at the ballot boxes," Hosseini said.
Hosseini also called the conservatives’ victory an expression of the popular mood in the country.
"The loser from these elections was undoubtedly the U.S. The mass of the people and the youth in the country were the true victors," Hosseini said.
In a statement, the European Union's presidency said the vote was "neither fair nor free." It said over a third of prospective candidates were prevented from running in the elections.
The U.S. State Department said the election results were "cooked" because the Iranian people were not able to vote for a full range of candidates.
Reformist leaders and independent observers say the vote was not fair because the Guardians Council -- an unelected body of clerics and jurists -- disqualified some 1,700 mostly moderate candidates on the grounds that they were insufficiently loyal to Islam or Iran's 1979 revolution.
Voting irregularities were also reported during the polling.
Speaking at a news conference in Tehran on March 15, reformist coalition spokesman Abdollah Naseri said the reformists were determined to participate in the parliament in hope of bringing change to the Islamic republic.
"At this stage none of our candidates are willing to resign even if they are confronted with the most impossible obstacles, with the knowledge that their rights have been taken away from them and they will participate in parliament," Naseri said.
Prominent Tehran-based journalist Issa Saharkhiz told Radio Farda today that despite the strong conservative showing, Ahmadinejad will likely have a more difficult time with the new parliament than he had with the outgoing legislature.
The differences between hard-line supporters of Ahmadinejad and a more moderate faction aligned with former nuclear negotiator Ali Larijani could also encourage a conservative challenge to Ahmadinejad in presidential elections in 2009.
Speaking on March 15 in the city of Qom, where he won a seat in parliament, Larijani said he vowed "cooperation between the parliament and the government."
Larijani, who is seen as possibly eyeing his own presidential bid, also said he had no ideological dispute with Ahmadinejad and that their disagreements were mainly about style.
Larijani quit his post as nuclear negotiator last year citing differences with Ahmadinejad about how to handle the international crisis over Iran's nuclear program.
The moderate conservatives are led by Larijani, Tehran Mayor Mohammad Baqer Qalibaf, and former Islamic Revolution Guards Corps chief Mohsen Rezaie.
There are also two coalitions of reformers: the Reformist coalition inspired by former reformist President Khatami and the National Confidence Party led by former parliament speaker Mehdi Karrubi.
Reformists and some conservatives have accused Ahmadinejad of fueling inflation, which now stands at 19 percent, with loans and subsidies. Reformists have also criticized him for his vitriolic anti-Western rhetoric, which has led to Tehran's increased international isolation.
In the last parliamentary elections, in 2004, conservative opponents of reformist President Mohammad Khatami captured an overwhelming majority of the seats at stake -- including in liberal-leaning Tehran. A runoff strengthened conservatives' hand, increasing their total to 190, while reformists held 50 seats, independents 45, and religious minorities five.
Disqualifications Authorities reportedly had barred some 2,500 reform-minded candidates from competing.
Perceptions Abroad The voting was seen as cementing hard-liners' grip on power while delivering a sharp rebuke to Khatami, whose moderate image had provided hope for supporters of economic liberalization. The European Union decried the voting as undemocratic before final results had even come in, warning of a fallout.
In the parliamentary elections of 2000, would-be reformers backing Khatami crush conservatives in February 2000 to take control of parliament on the back of an election turnout of over 67 percent, handing Khatami a mandate to carry out his program of social, political, and economic reforms. The showing meant that hard-liners were ousted from control of parliament for the first time since the 1979 revolution. After a runoff, reformists ended up with 170 seats, conservatives 45, and independents 10.
Disqualifications The Guardians Council had eventually disqualified nearly 700 candidates from the running.
Perceptions Abroad EU members had decided to normalize relations with Tehran after Khatami's accession to the presidency. The United States called the result a "hopeful sign for the West" and expressed cautious encouragement for the "reformists."