Also nominated for best picture were the Truman Capote story Capote; the ensemble drama Crash; the Edward R Murrow chronicle Good Night, and Good Luck; and the assassination thriller Munich.
The Johnny Cash biography Walk the Line, considered a likely best-picture nominee, was shut out of that category, though Joaquin Phoenix and Reese Witherspoon earned acting nominations.
Three films were tied with six nominations each - Crash, Good Night, and Good Luck and Memoirs of a Geisha, though Geisha was shut out in the top categories.
Munich, which had fallen off many awards analysts' best-picture picks after a lukewarm reception, scored well with five nominations, including director for Steven Spielberg.
King Kong, directed by Lord of the Rings creator Peter Jackson, earned only technical nominations, losing out in the major categories.
George Clooney picked up three nominations: as supporting actor for his role as a steadfast CIA undercover agent in Syriana and best director and co-writer for Good Night.
It was the first time ever that a contender was honoured with acting and directing nominations for two different movies.
Along with best-actor contender Ledger, and directing nominee Lee, Brokeback Mountain scored nominations for Michelle Williams as supporting actress, Jake Gyllenhaal as supporting actor and Larry McMurtry and Diana Ossana for their screenplay adaptation of Annie Proulx's short story.
The acting categories were a mix of familiar Oscar faces such as past winners Judi Dench and Charlize Theron, veterans like Clooney, Witherspoon, Rachel Weisz, David Strathairn and Felicity Huffman gaining their first academy attention, and young performers such as Williams and Amy Adams.
Terrence Howard is nominated
for his lead role in Hustle & Flow
Philip Seymour Hoffman, the best-actor favorite for his remarkable embodiment of Capote, joined Ledger in the best-actor category. Hoffman has triumphed at earlier film honours, including the Golden Globes.
Along with Hoffman, Ledger and Phoenix, the other nominees were Terrence Howard as a small-time hood turned rap singer in Hustle & Flow and Strathairn as newsman Murrow in Good Night and Good Luck.
The best-actress race presumably will shape up as a two-woman contest between Huffman in a gender-bending role as a man about to undergo sex-change surgery in Transamerica and Witherspoon as singer June Carter, Cash's musical companion and future wife, in Walk the Line.
Huffman won the Golden Globe for best dramatic actress, while Witherspoon earned the Globe for best actress in a musical or comedy.
There are previous winners in the
race like Charlize Theron
Witherspoon beat Huffman on Sunday for the best-actress prize at the Screen Actors Guild Awards.
Also nominated for the best-actress Oscar: Dench as a society dame who starts a nude stage revue in 1930s London in Mrs Henderson Presents; Keira Knightley as the romantic heroine of the Jane Austen adaptation Pride & Prejudice; Charlize Theron as a mine worker who leads a sexual-harassment lawsuit against male co-workers in North Country.
Brokeback Mountain led a wave of independent films that scored big in the nominations, instead of the studio fare that normally dominates the Oscars.
Other than Munich, most bigger budget movies that had been on the best-picture radar, such as Walk the Line, Memoirs of a Geisha and Cinderella Man, were overlooked in the top Oscar category.
The year's biggest hit, Star Wars: Episode III - Revenge of the Sith, earned only one nomination, for makeup, but was shut out otherwise - including the visual-effects category, a blow to George Lucas and his Industrial Light & Magic outfit that has pioneered special effects.
The visual effects nominees were The Chronicles of Narnia: The Lion, The Witch and The Wardrobe, King Kong, and Spielberg's War of the Worlds.
With key prizes at earlier Hollywood honours, Brokeback Mountain heads into the 5 March awards as the best-picture front runner, potentially the first film with explicit homosexual themes to claim the grand prize at the Oscars.
Brokeback Mountain is the
front runner for best film
The film stars Ledger and Gyllenhaal as Western roughnecks who share a summer of love while tending sheep together in the 1960s, then carry on a lifelong romance they conceal from their families.
Williams co-stars as Ledger's wife, who overlooks her husband's affair to try to hold her family together.
Weisz, playing a humanitarian-aid worker in The Constant Gardener, won the supporting-actress prize at the Golden Globes and SAG awards, giving her the inside track for the same honour at the Oscars.
Along with Weisz and Williams, supporting-actress bids went to newcomer Adams as a big-hearted Southern waif in Junebug; Catherine Keener as To Kill a Mockingbird author Harper Lee in Capote; and Frances McDormand as a miner coping with debilitating disease in North Country.
Foreign Language films
Among the foreign language films nominated for an Oscar is the first Palestinian film, Paradise Now, which also won a Golden Globe award earlier this year.
No Palestinian film has been nominated before.
*Paradise Now is the first
Palestinian Oscar-nominated film
The film was directed by Palestinian Hany Abu Assad from a screenplay he co-wrote with Bero Beyer, the film's Dutch producer.
Paradise Now chronicles the 48 hours before two best friends in Nablus on the West Bank are sent on a bombing mission to Israel.
It explores the motivation behind such action by ordinary Palestinians.
Also nominated in this category is Tsotsi, a South African film.
Set amidst the sprawling Johannesburg township of Soweto - where survival is the primary objective - Ttotsi traces six days in the life of a ruthless young gang leader who ends up caring for a baby accidentally kidnapped during a car-jacking, according to the film's official website.
Other nominations are Don't Tell, an Italian production, Joyeux Noël from France and Sophie Scholl - The Final Days, a German producation.
Besides Gyllenhaal and Clooney as a bullheaded CIA agent in Syriana, nominees for supporting actor were Matt Dillon as a racist cop in Crash; Paul Giamatti as a boxing manager in Cinderella Man; and William Hurt as a ruthless mobster in A History of Violence.
Hurt was a bit of surprise since he only appears for a few minutes at the end of the film in scene-stealing role.
David Strathairn gains his first
Lee, who won the Directors Guild of America honour Saturday for Brokeback Mountain, is the clear favourite to win the best-director Oscar.
Along with him, Spielberg and Clooney, other directing nominees were Paul Haggis for Crash and Bennett Miller for Capote.
It was the first time since 1981 that the same five movies were nominated for directing and best picture.
And for the first time since the animated feature film category was added in 2001 that no nominees were made using computer-generated imagery.
The nominees: the hand-drawn Howl's Moving Castle, and the stop-motion films Tim Burton's Corpse Bride and Wallace & Gromit in The Curse of the Were-Rabbit.
Oscar nominees in most categories are chosen by specific branches of the Academy of Motion Picture Arts and Sciences, such as directors, actors and writers.
The full academy membership of about 5800 is eligible to vote in all categories for the Oscars themselves.
*Photograph courtesy of Warner Independent Pictures