The vote will be a key to the future of Asia's newest democracy amid concerns the half-island nation's oil and gas revenues are rapidly running dry.

"I'm really happy ??? most of the eight candidates are good men who could help my country," said Mateus Lucas, a 49-year-old father of three, who voted at a school in Dili.

"I voted amid fear in 1999 but now I am free to vote for whoever I like," he said, referring to a violence-hit United Nations referendum where Timorese voted to break away from Indonesia.

The election is the first that East Timor has organised without the help from the UN.

Officials had to overcome huge logistical problems reaching remote polling stations without UN helicopters to ferry ballot boxes. Voting queues were long in most areas, although voting is not compulsory.

Damien Kingsbury from Victoria's Deakin University, who is leading a delegation of 26 Australian poll observers, said East Timorese embrace elections "almost as a sacred duty".

"Out in the villages you see people enthusiastically queuing up to vote and then they go back to their villages to celebrate the vote which they turn [into] a day of festival," he said.

Some localised violence marred campaigning but overall it was largely violence-free.

The frontrunner likely to be elected president ahead of general elections in July is Francisco "Lu-Olo" Guterres, a former guerrilla fighter backed by Fretilin, the party that led the independence struggle.

If there is an upset it will come from younger voters supporting Democratic Party politician Antonio da Conceicao, the current education minister.

"The young generation also participated in the struggle for independence. I stand for them. They are looking to establish their own identities," Mr da Conceicao told Fairfax Media on the eve of the vote.

"They see themselves as second-class citizens now."

Mr da Conceicao's campaign centred on a pledge to build the nation "from the grass roots" by ensuring the majority of people who live in rural areas have enough food, access to markets, schools, clinics and water and sanitation.

East Timor remains one of Asia's poorest nations, where corruption and lack of transparency in government have emerged as key issues.

More than 90 per cent of the country's budget comes from oil and gas revenues.

Mr da Conceicao, a former figure in East Timor's anti-Indonesian resistance, said a priority for his country is to secure its boundaries, including in negotiations with Australia over $40 billion in oil and gas fields in the Timor Sea.

Revenues from East Timor's Bayu-Undan oil and gas field in the Timor Sea is set to dry up in the next five years, intensifying pressure to resolve the country's bitter stand-off with Australia over the undeveloped Greater Sunrise field.

Mr da Conceicao said he is worried the vote will be manipulated.

"If it is not a fair process then I will protest," he said.

Mr da Conceicao's best chance to win will be if there is a run-off election in April. The president is elected by an absolute majority to serve a five-year term via a two-round system.

The position is largely ceremonial but the incumbent, Jose Maria de Vasconcelos, known as Taur Matan Ruak, has spoken out about corruption and insisted on revision of the government's budget.

Mr Vasconcelos is expected to contest the July general elections for the newly formed People's Liberation Party (PLP), aiming to take the even more powerful position of prime minister.

But analysts say revolutionary hero Xanana Gusmao remains the country's most influential figure and whoever he backs for the prime ministership is likely to win.

The prime minister is appointed through a vote of the country's 65 members of parliament.

East Timor has 744,613 registered voters in a population of 1.26 million.

In an interview with Fairfax Media on Saturday, Mr Guterres said there are now "better prospects" for Australia and East Timor to negotiate sea borders that could lead to the development of the Greater Sunrise field. He also left open the possibility of gas from the field being extracted from a floating platform or piped to an existing refinery in Darwin.

But Mr Guterres' office issued a statement several hours later saying he supports only the option for the gas to be piped to a proposed $US1.4 billion ($1.8 billion) industrial complex on East Timor's remote southern coast.