Nir Barkat, a secularist venture capitalist, looks set to take the powerful office of Jerusalem's mayor, according to early exit polls.
Israel's Channel One television station reported projections shortly after the polls closed on Tuesday that indicated Barkat should receive around 50 per cent of the vote.
Barkat's main rival, ultra-Orthodox rabbi Meir Porush, would be pushed into second place, receiving around 42 per cent of votes, the broadcaster said.
Jackie Rowland, Al Jazeera's correspondent in Jerusalem, emphasised the results were only projections but said they suggested residents had voted for change after five years under the outgoing Orthodox mayor.
"There has been a certain amount of interest among secular people in the hope that they had a candidate who could possible win and reverse the trend of increasing restrictions according to religious law introduced by the outgoing mayor," she said.
However, Rowland pointed out figures obtained two hours before polling stations closed suggested only one third of registered voters had turned out.
She said left-wing residents could have been alienated by the choice of candidates.
"There could have been a surge [of voters] at the last minute ... but both candidates are essentially right-wing candidates, both wanting to expand illegal settlements in and around the city," she said.
"The culture war is the main issue. It's a battle between the secular and the ultra-Orthodox"
political scientist at Bar-Ilan University
The candidates reflect the differences between Jewish groups living in Jerusalem, where in Orthodox neighbourhoods, families in traditional black garb attend the synagogue during the Sabbath and Jewish holidays while in downtown Jerusalem, secular Jews frequent non-Kosher bars and eateries.
Shmuel Sandler, a political scientist at Bar-Ilan University near Tel Aviv, said: "The culture war is the main issue. It's a battle between the secular and the ultra-Orthodox."
The Jerusalem vote is among the most significant of about 160 local elections held across Israel on Tuesday before a national parliamentary poll on February 10.
Although none of Jerusalem's mayoral candidates represented any of Israel's ruling parties, analysts had warned there could be a backlash by voters against religious parties in the nationwide ballot if Porush won.
About 750,000 people live in Jerusalem, including 260,000 Palestinians. Palestinians who, along with most world powers, do not recognise Israeli rule of occupied East Jerusalem said they would boycott the vote.
Barkat angered some supporters by courting religious voters with promises to support Jewish settlement expansion in Jerusalem - a move Porush also supports.
Israel's Haaretz newspaper responded with an editorial urging "Vote 'no' on Barkat" and some intellectuals have vowed publicly not to vote for him.
Many secular Israelis in Jerusalem say they are worried by growing poverty in the city, where many ultra-Orthodox Jews have large families and low incomes.
Concerns over growing "conservative" trends in Jerusalem were heightened after city administrators caused a stir recently by forcing young women dancers at the ceremonial opening of a bridge to cover their hair and don sack-like dresses to avoid offending rabbis.