Read 538 for the numbers behind this, but here's their conclusion:
With results this close, it is likely that the negotiations for the new government will be quite extensive. Reports of multiple high level meetings between various party and coalition leaders have been made, with only a few parties completely incompatible in terms of building a governing coalition. The Sadr faction of the National Iraqi Alliance has ruled out working with an Allawi government, but State of Law, the Kurds and Iraqiya are in close negotiations.
In the near term, these negotiations may be hampered by the accusations of fraud that have flown in all directions. Early on, members of Allawi’s coalition accused the electoral commission and local officials in Baghdad of engaging in fraud to help Maliki’s State of Law Coalition. Similar accusations were made by the Iraqi National Alliance and State of Law at one another in the south. In turn, now that Allawi's returns have improved, State of Law has accused him of fraud and demanded a national recount.
As a result, the electoral and governing situation remains in flux, particularly as the United States endeavors to play an increasingly low profile role in the country. The Obama administration and military officials are looking for a resolved and stable government to emerge from this election, securing the way forward for a phased withdrawal through 2011.
On the other hand, further accusations of fraud, a failure to build a governing coalition or the unhinging of various extreme elements of the Sunni Arab and Shia communities could together prompt much of the progress of the last several years come undone. As such, much rides on this election, based on peaceful negotiation and principled transfer of power.
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