Burmese democracy champion Aung San Suu Kyi all but completed her transformation from imprisoned icon to elected member of parliament Sunday as her party claimed it had won a resounding victory in an election considered a key test of political reforms in Burma.

The Nobel Peace Prize winner’s allies said she had soundly defeated her opponent from the ruling party, recording wins at all but one of 128 polling stations in her rural constituency near this Southeast Asian nation’s former capital, Rangoon. With results still coming in Sunday evening, Suu Kyi’s National League for Democracy party projected it would claim 40 of 45 seats being contested across Burma. The country’s election commission is expected to confirm the much-anticipated results in the coming days.

In Washington, the White House on Monday congratulated “the people of Burma on their participation in the electoral process, and Aung San Suu Kyi and the National League for Democracy on their strong showing in the polls.” Press secretary Jay Carney said in a statement: “This election is an important step in Burma’s democratic transformation, and we hope it is an indication that the government of Burma intends to continue along the path of greater openness, transparency and reform.”

While the result leaves the NLD with only a small fraction of the 664 seats in the Burmese parliament, the vote was the most dramatic gesture yet in the government’s sudden turn toward reform after decades of unyielding oppression. Since becoming president of Burma one year ago, the former general Thein Sein has freed political prisoners and signed cease-fire agreements with rebel ethnic groups.

The moves are believed to be aimed at winning concessions from the West, which has long tried to isolate Burma in hopes of forcing the government to loosen its grip. In January, Secretary of State Hillary Rodham Clinton announced that the United States would send an ambassador to Burma for the first time in more than two decades.

The U.S. government had identified Sunday’s poll as a critical measure of Burma’s progress, suggesting that it may begin to dismantle a raft of economic sanctions against the nominally civilian regime. That is widely expected to happen in stages, as Washington seeks to maximize its leverage.

Clinton, who made a landmark visit to Burma at the end of last year in what was seen as a reward for Thein Sein’s reforms, gave a cautious reaction to the vote Sunday. “We are following elections with great interest. With the results not yet announced, the United States congratulates the people who participated, many for the first time,” she said.

“Going forward, it will be critical for authorities to continue working toward a system that includes transparency.”

Sunday’s vote represented a further softening of a long-running standoff between the regime and Suu Kyi. After her party won elections in 1990, she spent 15 years out of the next two decades under house arrest before being freed less than a week after a rigged election in November 2010.

Many Burmese viewed Suu Kyi’s incarceration as an attempt to curtail her popularity, but she emerged from house arrest with an international following for her stand against despotism and with her domestic supporters energized.

Suu Kyi, who is the daughter of Burmese independence hero Aung San, will be 70 years old when Burma holds its next general election at the end of 2015. That poll is widely viewed as the true test of whether the regime is willing to move toward genuine democracy in the nation also known as Myanmar.

Since her release, the government has allowed her party to reopen offices across the country and Suu Kyi to campaign in advance of Sunday’s by-election.

Despite the apparently overwhelming win by the NLD on Sunday, the Burmese parliament remains dominated by the military and its supporters. The army itself is guaranteed a quarter of the seats.

Voting on Sunday in Suu Kyi’s constituency was marred by unconfirmed reports suggesting ballot papers may have been spoiled with wax at some polling stations to prevent voters from recording their support for her. Leading up to the election, she had complained of inconsistent electoral rolls and improper restrictions on her campaign.

Despite the flaws, international observers said Sunday’s poll was an improvement on the November 2010 general election, in which candidates allied with the military junta swept to victory. That votecompleted Burma’s transition to a nominally civilian government, although the country remains ruled by former generals, and active-duty officers continue to play a hugely influential role.

“Voting seemed orderly and we were pleased with the level of access we were given,” said one Western election observer who spoke on condition of anonymity after polling closed in the rural area of Kawhmu, which, assuming the initial projections stand up, Suu Kyi will now represent in parliament.

The town took on a carnival atmosphere for much of the weekend as large numbers of voters returned from Rangoon, Burma’s largest city, to their home town to register their support for Suu Kyi. It was the first time they had been able to do so since the aborted election victory by Suu Kyi’s party in 1990, when the generals kept hold of power despite the results.

May Nwe Soe, 33, a garment factory worker in Rangoon who earns the equivalent of about $50 a month, said she made the trip back home to vote for Suu Kyi.

“Words can’t describe it,” she said as she gathered with friends at a small wooden shop beside a polling station in Kawhmu. “I am very, very happy to have had this chance.”

She said she hoped this election would lead to positive change in Burma, a country that has had nearly 50 years of uninterrupted military rule. “I just want Aung San Suu Kyi to become a member of parliament — if she is there, it will surely improve,” she said.

Maung Zarni, a London-based Burma analyst, said that although the poll represented progress of sorts, Burma’s political landscape remains tightly controlled by a regime more interested in offering token reforms than genuine change. “It is hard to see how Washington will be able to justify lifting some of the major components of sanctions, despite all the hype over reforms by the generals,” he said.

Finch is a special correspondent.