More than 190,500 people are registered to vote in the Turkish Republic of Northern Cyprus (TRNC), established in the wake of Turkey's 1974 invasion of the island in response to an Athens-backed coup.
The vote comes ahead of presidential polls later this month in the internationally recognised Greek-majority Republic of Cyprus with peace efforts on hold until both sets of elections are over.
Polling stations opened at 0600 GMT and are to close at 1600 GMT.
The election in northern third of Cyprus comes six months after efforts to reunify the island collapsed at a UN-hosted peace summit in Switzerland over a number of disputes, including the withdrawal of Turkey's 45,000 troops.
The TRNC, whose statehood is only recognised by Turkey, is currently governed by a coalition of the right-wing National Unity Party (UBP) and its junior partner the Democratic Party (DP).
Analysts say the DP of Serdar Denktas -- son of late TRNC founder and hardline leader Rauf Denktas -- could fall under the five percent threshold due to intra-party disputes.
The UBP and the pro-solution Republican Turkish Party (CTP) are the other major parties in the election, followed by the Peoples' Party (HP) of Kudret Ozersay -- a former negotiator in peace talks with the Greek Cypriots.
The election, originally planned for July, were brought forward after tensions in the ruling coalition and the opposition pressed for snap polls.
Bread-and-butter issues
Analysts say a coalition government is the most likely outcome because no one party is likely to win an absolute majority in the 50-seat parliament.
The Social Democracy Party (TDP) of Turkish Cypriot president Mustafa Akinci -- regarded as strongly pro-solution -- and the newly established far-right Rebirth Party (YDP) founded by settlers of Turkish origin are also running in the election.
Observers say, however, that the Cyprus problem has not played a central role in the campaign, which focused on bread-and-butter issues like the economy, with Turkish Cypriots still hugely dependent on Turkish assistance.
But a pro-solution government could give Akinci a better hand to play in any future talks with the Greek Cypriots while a harder line administration would deal a blow to his authority.
The personal life of UBP leader and prime minister Huseyin Ozgurgun came under the spotlight during the campaign, after he announced in December that he was getting divorced following reports he had an affair with a well-known Turkish Cypriot actress.
On January 28, the Republic of Cyprus is set to hold a presidential election in which conservative incumbent Nicos Anastasiades is the frontrunner.
Anastasiades has campaigned on a pro-peace ticket, vowing to try to revive talks with Akinci, despite the souring of their relationship after two years of tough and ultimately fruitless negotiations.
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