Greece's Alexis Tsipras has said his left-wing Syriza party has a "clear mandate" after winning a second general election in less than nine months.
But he said Greeks faced a difficult road and recovery from financial crisis would only come through hard work.
Syriza has won just over 35%, slightly down on its previous result.
That is again short of a majority, but Syriza will form a coalition with the nationalist Independent Greeks. Conservative New Democracy won 28%.
The far-right Golden Dawn, which is set to be the third biggest party, won 7% of the vote compared with 6.3% in the election in January when Mr Tsipras was first elected.
Sunday's snap election was called after Syriza lost its majority in August. This followed the signing of an unpopular new financial bailout deal with international creditors.
Turnout in Sunday's poll was just over 55%, down from 63% in January and low by Greek standards.
'Difficulties ahead'
"I feel vindicated because the Greek people have a clear mandate to carry on fighting inside and outside our country to uphold the pride of our people," Mr Tsipras told supporters in Athens.
"In Europe today, Greece and the Greek people are synonymous with resistance and dignity, and this struggle will be continued together for another four years.
"We have difficulties ahead, but we are also on firm ground. We won't recover from the struggle by magic, but it can happen with hard work."
Mr Tsipras was joined on stage by Panos Kammenos, leader of the nationalist Independent Greeks, who also entered a coalition with Syriza after January's election.
"Together we will continue the struggle we began seven months ago," Mr Tsipras said.
Greece still faces formidable economic challenges. It is still in recession and the new government has to satisfy international creditors that it is fulfilling the terms of the €85bn ($97bn, £60bn) bailout.
Creditors are due to review the progress of the programme in October. Some Syriza MP's remain opposed to the terms of the bailout.
Jeroen Dijsselbloem, who heads the Eurogroup meetings of eurozone finance ministers, said he was "ready to work closely" with the new Greek government.
"Now a solid government ready to deliver is needed quickly," said European Parliament president Martin Schulz, offering his congratulations.
The latest projection gives Syriza 145 seats in the 300-seat parliament, with New Democracy on 75. This is only four fewer than Mr Tsipras's January victory, but again leaves him just short of an absolute majority.
But the Independent Greeks are likely to get 10 seats.
Source: BBC