By Hasmik Mkrtchyan and Margarita Antidze
YEREVAN (Reuters) - Armenian President Serzh Sarksyan's Republican Party is on course to win Sunday's parliamentary election, the Central Election Commission (CEC) said.
Its main partner in the previous coalition, the Prosperous Armenia party led by wealthy businessman Gagik Tsarukyan, was set to finish second, the CEC said on its website.
After counting results from more than 50 percent of the polling stations, the CEC said the Republican Party had won 46.23 percent and Prosperous Armenia 30.72 percent of the vote.
According to preliminary results, three more parties are likely to win the 5 percent of votes needed to enter parliament in the former Soviet republic.
The Armenian National Congress, an opposition coalition led by former President Levon Ter-Petrosyan, might also cross the 7-percent threshold set for blocs of parties to win seats.
Many voters and Armenian leaders had hoped the election would be a landmark for democracy after voting irregularities marred the last parliamentary election in 2007 and clashes killed 10 people after the presidential vote in 2008.
More than 300 international observers from the Organisation for Security and Cooperation in Europe monitored voting and will give their initial verdict on Monday.
The exit poll showed after voting ended in the South Caucasus country that Republican Party would keep its grip on power, with Prosperous Armenia in second place.
There were no reports of violence, an encouraging sign for the nation that wants stability to boost its economy, devastated by a war with neighboring Azerbaijan in the 1990s and then the 2008-2009 global financial crisis.
The parties made social problems and economic issues the main issues of an election campaign that was unusually active for Armenia, Russia's main ally in the South Caucasus.
There were no major differences in their economic programs, which call for more active development of domestic industry and continuation of cooperation with Russia as well as international financial organizations.
A blast at a campaign rally injured about 150 people on Friday, briefly raising fears of violence, but emergency officials said it was caused by gas-filled balloons exploding.
Armenia is nestled among mountains in a region that is emerging as an important route for oil and gas exports from the Caspian Sea to world markets, although it has no pipelines of its own.
Although a ceasefire was reached in 1994, its conflict with Azerbaijan over the tiny Nagorno-Karabakh region remains unresolved and a threat to stability.
Relations with another neighbor, Turkey, are also fraught because Ankara does not recognize as genocide the killing of Armenians in Ottoman Turkey during World War One.