Prime Minister Bjarni Benediktsson casts his vote in Reykjavik | Halldor Kolbeins/AFP via Getty Images Iceland’s ruling party dealt blow in national election A left-leaning coalition could form next government.

Icelandic Prime Minister Bjarni Benediktsson's ruling party suffered a defeat in Saturday's national election, making way for a left-leaning coalition to form the next government.

The election results on Sunday showed a coalition could be formed with the Left-Green Movement, the Social Democrats, the Progressive Party and the Pirate Party, which together would hold 32 out of 63 seats.

Benediktsson's center-right Independence Party suffered a loss of five seats, keeping just 16.

Former Prime Minister Sigmundur Davíð Gunnlaugsson's Center Party — which was only formed last month — won seven seats.

Eight parties surpassed the threshold to enter the country's parliament, the Althing — a drastic change from the traditional four-party system that has dominated Icelandic politics for decades.

While it is unclear who will take the lead to form the next government, the vote is seen as a blow to Benediktsson and his party.

The small nation of 335,000 people has been through unprecedented political turbulence in recent years. Saturday’s vote will be the fourth general election since the 2008 financial crisis, which brought the economy to the brink of collapse, and the second snap poll in a year.

Benediktsson called Saturday's election after his coalition collapsed due to a scandal involving his father, who wrote a letter of recommendation to restore civil rights for a convicted pedophile. Benediktsson's government was accused of covering up the controversial letter.

Gunnlaugsson was forced to quit last year as prime minister over revelations in the Panama Papers, which showed that he and his wife had bought a British Virgin Islands-based offshore company in 2007. He later sold his stake in the company but never declared having an interest in the firm.

Benediktsson has also been accused of acting on prior knowledge when selling his assets in a major bank's investment fund in the run-up to the financial crash in 2008.