Steven Wagenseil, the UN chief electoral officer, said: "Citizens showed up in large numbers to cast their votes, happily, peacefully.
"This is a very good sign for the future of the country."
Jose Ramos-Horta, 57, the prime minister who is running as an independent candidate, had been seen as an early favourite for the five-year presidency but could not secure an outright majority.
The other two candidates likely to enter a runoff are Francisco Guterres, a former guerrilla fighter and a member of Alkatiri's Fretilin party, and Fernando de Araujo of the Democratic party, another former resistance leader.
East Timor formally declared independence in 2002 but descended into chaos last year after Mari Alkatiri, the then-prime minister, fired one-third of the tiny army, provoking gun battles between rival security forces that spiralled into gang warfare and looting.
At least 37 people were killed and some 155,000 displaced before the government collapsed.
Tens of thousands of refugees have yet to return home, and the country remains desperately poor, with a 50 per cent unemployment rate.
East Timor was a Portuguese colony for more than three centuries before it was invaded by Indonesia in 1976.
Guerrillas spent the next 24 years fighting the occupation, a struggle Ramos-Horta championed from exile.
In the country's first election for independence in 1999, Indonesian troops and their militia allies killed more than 1,000 people and razed Dili to the ground.