"Our project is to form a stable progressive government led by the @PSOE to make policies for the benefit of the majority," acting Prime Minister and PSOE leader Pedro Sanchez said in a tweet. "All Parties must act with generosity and responsibility starting tomorrow to unlock the country."
The conservative Popular Party (PP) won the second-most seats with 87. The right-wing Vox Party made major gains, more than doubling their seats from 24 to 52. A party needs at least 176 seats in the Congress in order to gain control of the government.
It was the second time in just over six months -- and the fourth in as many years -- that Spain went to the polls. The Spanish Socialist Workers Party won the most seats in elections in April but, after months of negotiations, failed to form a government.
The fifth-largest economy in Europe, Spain has been in a political deadlock since former Prime Minister Mariano Rajoy was ousted by a no-confidence vote over a corruption scandal in his party.
Spain's two-party system also fragmented in recent years, with both the PSOE and the PP coming under pressure following the 2008 financial crisis and a series of corruption scandals.
The emergence of the left-wing Unidos Podemos (UP) and the center-right Ciudadanos (Citizens) party, and the growth of Vox, also shook up the established political order. A number of groups representing Spain's autonomous regions, such as Catalonia and the Basque Country, have also risen in prominence.
The election was called after Sanchez failed to secure enough support in the 350-seat Parliament to form a government, despite months of negotiations. He announced in September that Spain would go to the polls November 10, less than seven months after the April general election that proved inconclusive.
"There is no majority in congress that guarantees the formation of a government," said Sanchez.
Blaming opposition parties for the political deadlock, Sanchez added: "I've done all I can, but they've made it impossible."
Political crisis tied to issue of Catalan independence
Spain is the only western European country never to have been governed by a coalition.
In recent years, several minority governments have been shored up by parliamentary alliances, but with a number of polarizing issues in play this time around, forming a government has been difficult.
The current political crisis, which is the worst the country has faced since the restoration of democracy in the late 1970s, is tied to the issue of Catalan independence.
The Catalan independence question boiled over in 2017 when separatist leaders triggered a standoff with the government after attempting to push forward with the region's secession. Experts say it has sparked a resurgence in Spanish nationalism, and has been key to the growth of the far-right Vox party.
While the Socialist party has won votes in urban areas thanks to progressive reforms on women's and LGBT rights, the pace of change has also led to a backlash in other places.
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