Conservatives won a clear victory in parliamentary elections in the mostly Greek Republic of Cyprus in the southern part of the divided Mediterranean island on Sunday, but saw their support fall amid unpopular austerity measures.

The Democratic Rally (DISY) party of President Nikos Anastasiades won 30.7 per cent of the votes to take 18 seats of the 56 seats up for election in the House of Representatives. The communist Progressive Party of the Working People (AKEL) was in second place with 25.7 per cent of the vote and 15 seats.

Both of the top parties saw their share of the vote fall from elections five years ago, with the conservatives losing 3.7 per cent and the communists 7 per cent. Many Cypriots have suffered under an EU-mandated austerity programme enacted in 2013 and the country only earlier this year was able to exit an International Monetary Fund rescue programme.

Anastasiades' term in office ends in February 2018 and the parliamentary election was seen as a test of his popularity.

The loss of seats by both major parties signaled dissatisfaction that benefited minor parties.

Third-place went to the Democratic Party (DIKO) with 14.5 per cent and four other small parties cleared the hurdle to have representation.

For the first time in the island's history, a right extremist party, the National Popular Front (ELAM), cleared the hurdle to enter parliament and will have two seats, state television reported.

The election campaign was dominated by the ongoing division of the island, now in its 43rd year, as well as the fall-out from the Greek Cypriot republic's financial crisis.

Anastasiades is currently in talks with his Turkish Cypriot counterpart Mustafa Akinci to try and reunify the island.

People in the mostly Turkish northern part of the island, a republic only recognized by Turkey, are not permitted to take part in the vote.

Cyprus' system of government places the president above parliament. The president is directly elected by the people and appoints the council of ministers. Parliament has a legislative and scrutinizing role.

The DISY and a coalition of smaller parties support Anastasiades in parliament.

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