"After this press conference we will withdraw all our observers from polling stations and will demand that the election results be considered illegitimate," Atambayev said.
"We refuse to participate in such elections."
In a bid to reduce tensions, the authorities moved back the promised release of preliminary results from Thursday evening to just after midnight, then delayed it again until the central election commission released partial results early on Friday morning based on returns from 15 per cent of polling districts.
The dispute could heighten political tensions in the Central Asian nation, which hosts a US air base crucial to its military operations in Afghanistan.
Some 1,500 supporters gathered at the opposition headquarters on the outskirts of Bishkek as polling stations closed.
Hours before the polls closed, Bakiyev's leading rival Atambayev announced he was taking himself out of the running in the protest, though legal issues prevented him from officially withdrawing.
A planned march to the election commission office fizzled out after opposition leaders urged supporters to disperse, saying the authorities were planning to provoke violence and then blame it on them.
Thursday's vote was also monitored by hundreds of international observers, including more than 200 from the Organisation for Security and Co-operation in Europe, which is expected to release its report on Friday.
Robin Forestier-Walker, reporting for Al Jazeera from Bishkek, said Bakiyev had done several things to strengthen his hand, including increasing government spending and boosting salaries and pensions.
Grip on power
"He held parliamentary elections in 2007, which effectively removed any significant opposition from the parliament, so they effectively say 'yes' to all of his policies and vote him through," he said.
"That's left the political opposition without much to hold on to. They've been trying to mount a campaign since the end of last year to try to force the president to return to a more democratic mandate."
Elected in 2005 in a poll seen as free and fair by Western observers, Bakiyev has been accused by the opposition of becoming increasingly repressive and curtailing civil liberties.
Bakiyev's steps to tighten his grip on power and a string of mysterious attacks on politicians and journalists in the run-up to the election had raised concerns.
Police earlier fired in the air and used batons to break up a group of activists who rallied against what the opposition described as election fraud.
Thursday's poll was being closely watched for any signs of unrest that could disturb peace in Central Asia, given the country's strategic location for the US-led military campaign against the Taliban in neighbouring Afghanistan.
|The Manas airbase is used as a hub for US-led military operations in Afghanistan [Reuters]
Analysts say Kyrgyzstan's stability is vital to the region's.
The country and region have been largely peaceful since 2005 but tensions have risen in recent weeks with some analysts saying intensified fighting in nearby Afghanistan and Pakistan may have led to some Taliban fighters of Central Asian origin returning to the region.
In the past months, Kyrgyz forces have engaged in gun battles with fighters that the authorities describe as Islamist rebels but critics accused Bakiyev of using the excuse of an Islamist threat in the mostly Muslim nation to bolster his re-election chances and win concessions from the US and Russia.
Security was tight across Kyrgyzstan ahead of the vote, with 5,000 officers on high alert and extra measures enforced in the border areas.
The interior ministry said on the eve of the vote that its forces had confiscated more than 300 illegal guns and ammunition in special operations across the country.
Kyrgyzstan's proximity to Afghanistan has propelled it to the forefront of Russian-US rivalry in Central Asia, with both Moscow and Washington operating military bases in its mountainous territory.
Bakiyev seems to have exploited that rivalry, telling the US earlier this year to get out from its airbase in Manas, which is crucial to US operations in Afghanistan, after receiving more than $2bn in aid and loan guarantees from Moscow.
But the US was in June allowed to stay after agreeing to pay three times more rent to Kyrgyzstan, from $17.4m to $60m a year.