Luiz Inacio Lula da Silva called for "peace and unity" after narrowly defeating incumbent Jair Bolsonaro in a tight and acrimonious runoff election for Brazil's highest office on Sunday.

The triumph is a stunning turnaround for Lula, a charismatic but tarnished leftist heavyweight.

He left office in 2010 as the most popular president in Brazilian history but fell into disgrace when he was imprisoned for 18 months on corruption allegations that have since been dropped. He now returns for an extraordinary third term at age 77.

However, his opponent, Mr. Bolsonaro, has yet to react to his loss and has been claiming without evidence for months that Brazil's electronic voting system is riddled with fraud and that the judiciary, media, and other institutions conspired against his right-wing movement.

Some Bolsonaro supporters gathered in Brasilia and refused to recognize the election results.

"The Brazilian people will not accept a rigged election and turn our country over to a thief," said Ruth da Silva Barbosa, a 50-year-old educator.

Officials proclaimed Mr. da Silva the winner with 50.9% of the vote to Mr. Bolsonaro's 49.1%, with more than 99.9% of polling stations reporting, in the closest election since Brazil's return to democracy during its 1964-1985 dictatorship.

"Anywhere on earth, the losing president would have already conceded defeat. In his victory speech in Sao Paulo, Mr. da Silva told the enormous crowd, "He hasn't phoned yet, and I don't know if he will call to concede."

"This nation needs peace and harmony," he declared to thunderous applause.

"The challenge is enormous," he remarked, citing a hunger crisis, issues with the economy, fierce political divide, and Amazon destruction as examples of the work that lay ahead.

On Monday, Spanish Prime Minister Pedro Sanchez praised Mr. da Silva's triumph, and the country's Foreign Minister, Jose Manuel, told local media that Mr. da Silva's return bolstered expectations for combating climate change.

Mr. Manuel stated on RNE radio that "Lula's victory indicates a commitment to the fight against climate change, biodiversity, and for a special status for the Amazon, which is crucial for both."

Under Mr. Bolsonaro, deforestation of the Amazon, which had declined dramatically during Mr. da Silva's previous administration, increased dramatically. According to studies, the world's largest rainforest has been stressed to the point where it is beginning to emit more carbon than it absorbs.

Sunday, Mr. da Silva pledged to "work for zero deforestation."

Norway has already indicated that it will resume its work with Brazil on protection subsidies given to safeguard the Amazon, which it ceased under Mr. Bolsonaro.

Mr. Bolsonaro, a staunch conservative, is the first incumbent president in post-dictatorship history to lose reelection.

Although he has not publicly accepted the outcome, officials like the Speaker of the House of Representatives, Arthur Lira, have supported it.

He stated that it is time to "reach a hand to our rivals, argue, and develop bridges."

US President Joe Biden, Russian President Vladimir Putin, France's Emmanuel Macron, India's Narendra Modi, Britain's Rishi Sunak, and politicians from across Latin America extended their congratulations to Mr. da Silva.

The EU's chief diplomat, Josep Borrell, joined the worldwide well-wishers, as did the spokesman for China's foreign ministry and the German foreign minister.

Sunday evening, Mr. da Silva's supporters around the nation exploded in jubilation.

Maria Clara, a 26-year-old student, remarked at a victory party in downtown Rio, "We've had four years of a genocidal, racist regime."

"Today, democracy triumphed, along with the opportunity of once more imagining a better nation."

In Brasilia, a weeping mob of Bolsonaro followers — clothed in green and yellow, the colors of the Brazilian flag that the ex-army captain has claimed as his own — knelt in prayer.

Mr. Bolsonaro raced to power four years ago on a tide of fury with "politics as usual," but was criticized for his terrible management of the Covid-19 outbreak, which killed more than 680,000 Brazilians, as well as a weak economy, his polarizing manner, and attacks on democratic institutions.

Mr. da Silva will confront enormous obstacles upon his inauguration on January 1, regardless of how the current reacts.

On Tuesday, October 2, Mr. Bolsonaro's far-right allies won a major victory in legislative and gubernatorial elections in the first round of the election and will be the largest force in Congress.

Mr. Bolsonaro's former infrastructure minister, Tarcisio de Freitas, won the governorship of the country's most populous and prosperous state, Sao Paulo, on Sunday.

Thus, Mr. da Silva inherits a highly divided nation and a global economic environment that bears no resemblance to the commodities "supercycle" that enabled him to lead Latin America's largest economy through a watershed boom in the early 2000s.

On Monday, an exchange-traded fund that tracks Brazilian stocks rose as high as 5.2%, while overseas listings of Brazilian companies declined. In pre-market trade, Petrobras, the state-owned oil firm of Brazil, experienced one of the largest falls, falling more than 10%.

Investors are keeping a careful eye on the composition of Mr. da Silva's future cabinet and any indications that his opponent may contest the outcome.

However, this week's events may cause the markets to stabilize.

Stephen Innes, the managing partner of SPI Asset Management, stated, "We could see a relief rally if financial markets react favorably to evidence of political stability and policies and changes that would benefit investment and growth."