DILI (AFP) - Timor-Leste's citizens head to the polls on Tuesday (April 19) to choose either a Nobel laureate or a former guerrilla fighter - the incumbent president - as their next leader.

Polling stations in South-east Asia's youngest country opened at 7am (5am Singapore time) for what is a rematch of a 2007 election won handily by former revolutionary hero and peace prize winner Jose Ramos-Horta.

In the capital Dili, voters queued up outside polling stations and dipped their fingers in purple indelible ink after casting their ballots.

“My hope is the presidential candidate who is elected and the one who is not can shake hands and advise each other to ensure stability and not create a crisis,” said 27-year-old university student Lizia Bachita de Araujo.

“I want the president to be able to work with the government to create more jobs,” said Dili resident and housewife Pascoela da Silve Pereira. “It is difficult for people to provide for their households.”

After voting in the Dili suburb of Metiaut, Ramos-Horta said he was “very confident” he would win, but would accept any outcome.

The country's incumbent President Lu Olo Guterres, a 67-year-old former guerilla fighter also affirmed his commitment to accepting the results, saying: “This is democracy and I always say (win or lose) it must be with dignity.”

Nearly 860,000 people in the country of just 1.3 million are eligible to vote, and ballot counting could take several days. Early vote counts are expected to be available late on Tuesday.

Ramos-Horta also earned a dominant win in this election's first round on March 19, winning 46 per cent of votes versus President Guterres' 22 per cent, but failing to secure the needed majority. Participation across the nation reached 77 per cent as voters chose between 16 candidates, a record high number.

The winner will take office for five years from May 20 - the day Timor-Leste celebrates the 20th anniversary of its independence from Indonesia, which occupied the former Portuguese colony for 24 years.

The election is seen as a chance to reset a political deadlock between the two main parties: the National Congress of the Reconstruction of Timor-Leste (CNRT) and Revolutionary Front for an Independent East Timor (Fretilin).

Guterres, 67, a former guerilla fighter, is the Fretilin party president and was elected as the country's leader in 2017 with the support of former rebel Xanana Gusmao, the country's first president and current CNRT leader.

But this time Gusmao and his party chose to nominate Ramos-Horta, who was awarded the Nobel Peace Prize in 1996 for his efforts towards a peaceful solution to the conflict in Timor-Leste and was the main spokesperson of the independence movement. The 72-year-old, who came out of retirement to challenge Guterres, served as the country's first prime minister before his presidential term from 2007 to 2012. He survived an assassination attempt in 2008.

In 2007's presidential election, Ramos-Horta won by 69 per cent while Guterres gained 31 per cent of the votes.

The tiny nation of 1.3 million is still grappling with the Covid-19 pandemic's impact on its economy. According to the World Bank, 42 per cent of the population lives in poverty.

Political fractures have underscored this election, with Ramos-Horta, 72, signalling that he may use presidential powers to dissolve parliament and call for early parliamentary elections if he wins.

Gusmao, head of the CNRT party, has described the current government as “constitutionally illegitimate”.

The comment relates to president Guterres’ refusal to swear in more than half a dozen CNRT ministers after the 2018 elections due to investigations into their conduct, including alleged corruption.

The decision ignited the ongoing political impasse.

Ramos-Horta, who is backed by Gusmao, has said the nation can expect a “political earthquake” if he is elected.