The report was released by an independent team formed at the request of Ban Ki-moon, the UN secretary general, to assess the April 9 election.
The report found the election fully satisfied just 13 of 52 international benchmarks that the team had established.
"Every effort needs to be made to ensure that at the second round of presidential polling, and the forthcoming parliamentary election (in June), all of the benchmarks are satisfied," the report concluded.
The UN mission in East Timor said despite the report's findings, the election had been free and fair.
"UNMIT recognises that, while the first round of elections was not perfect, the consensus of the assessment was that it was free and fair, reflecting the will of the voters," it said in a statement.
"The electoral benchmarks reflect international standards and full compliance with these standards is indeed a challenge not only to Timor-Leste (East Timor) but also to fledgling and established democracies," UNMIT said.
Failed benchmarks included not having clear regulations governing voter registration and vote counting.
Actual vote counting had been secure and the process transparent, the report noted.
It also said it was not mandated to make a judgement on whether the election had been free and fair.
"The benchmarks do not represent an aspirational statement of achievable best practice: they simply encapsulate what is to be found in a typical well-run election," it said.