Sri Lanka's president took a strong lead in early returns on Wednesday, but his main challenger said he feared arrest after troops surrounded the hotel where he and other opposition leaders were staying.   

President Mahinda Rajapaksa led with 1.51 million votes against 983,022 for his former army commander, General Sarath Fonseka, with results from about a quarter of the votes cast in Sri Lanka's first post-war presidential poll officially released.   

The two war victors turned to foes in a bloody campaign that culminated in a largely peaceful election on Tuesday, with independent observers putting turnout at between 70 and 80 percent of the Indian Ocean island's 14 million registered voters.

Fonseka, a political neophyte, delivered an election day shock by admitting he was not registered to vote. Rajapaksa's camp said it would challenge his eligibility after the Election Commission said that did not disqualify him.

"The legal people are looking at it, but it may be only of academic interest if he loses,"  Central Bank Governor Ajith Nivard Cabraal told Reuters.

As the results came in, Rajapaksa's supporters lit celebratory firecrackers in the capital, Colombo.   

The military intrigue built after a surprisingly close and bitter contest between two estranged allies who led Sri Lanka to victory over the Tamil Tiger separatists in May, after a 25-year civil war many had deemed unwinnable.

Early on Wednesday, Fonseka said soldiers had surrounded the Cinnamon Lakeside hotel in Colombo where he was staying with former prime minister Ranil Wickremesinghe, the official opposition leader, and other opposition party heads.   

"These people have surrounded the hotel with military and threatened my security people," Fonseka told Reuters by phone. "They had a plan to surround us and take us into custody and I don't know if this is that phase of that particular operation."    

A Reuters reporter saw several hundred soldiers including commandos posted outside the hotel after blocking the road in front.   

A military spokesman had no comment, but a senior military source and a top presidential aide said Fonseka had been put under watch to ensure he did not attempt to organise a coup with loyalists from an army he commanded just eight months ago.

Fonseka in the final days of the campaign said the government had plans to either steal the vote or arrest him should he win.

The government laughed it off, saying Rajapaksa would win the race cleanly and had no need to cheat.   

The general on Tuesday said he expected to win by a million votes, but he did not even win his home electorate of Ambalangoda, tallying just 35.9 percent to Rajapaksa's 62.7 percent.

Rajapaksa called the poll two years early, hoping to capitalise on his post-war popularity to win a second six-year term to cement his legacy.

Fonseka as army commander ran a relentless counterinsurgency campaign to crush the Tigers, while Rajapaksa deflected an international push for a ceasefire and criticism over civilian deaths that prompted calls for a war crimes probe.

Whoever wins will take the reins of a $40 billion economy which has enjoyed a partial peace dividend, and is on the path to recovery with big Chinese and Indian investments into infrastructure and plans to put $4 billion into development. -Reuters