Right-wing gains

Yuval Steinitz, a Likud Knesset member, told Al Jazeera that the exit-poll predictions would prove inaccurate.

In depth

Al Jazeera's coverage of the Israel elections


Video: Palestinians sceptical of Israeli polls
"Last time Kadima got 32 seats [in exit polls] and in the morning it was 28 or 29. ... I assume that tomorrow morning we will be leading by one or two seats," he said.

Steinitz said Netanyahu would be selected to form a coalition because "Kadima and Livni can't form a government. Two or three months ago she had more seats together with the Labor party and she failed".

Under the electoral system, the president will ask the person deemed most likely to get a working coalition to form a government, rather than the candidate with the most seats.

The chosen party will be given 28 days - a period which Shimon Peres, the president, may extend by up to 14 days - to form a coalition holding at least 61 of the 120 seats in the Knesset or parliament.

Al Jazeera's Alex Sehmer, reporting from the Likud headquarters in Tel Aviv, said the exit polls being so close, both Kadima and Likud were saying they would form the next government.
 
"It certainly looks like the right-wing bloc has enough support to do it," he said.

The right-wing Yisrael Beiteinu party, led by Avigdor Lieberman, a Russian immigrant, is believed to have won around 15 seats, pushing Labor, led by Ehud Barak, the defence minister, into fourth place.

Hamas response

Hamas, the Palestinian group governing Gaza that Israel said it was targeting when it launched its military offensive there in December, said there would be little difference between a Kadima and a Likud government.

Speaking from Beirut, Osama Hamdan, a senior Hamas official, said "both sides are working against Hamas, against the Palestinians", but Netanyahu and the right-wing was doing it in a way "that cannot be defended" while Livni was doing it in a "very soft way so it can be defended by the West and the United States".

"This is the main difference between the two sides," he said, adding that you cannot tell "any clear difference between them when you are talking about the Palestinian issue, the peace process, the relations between the Israelis and the Palestinians".

'Labor's collapse'

Ehud Barak, the Labor leader, accepted defeat in a speech late on Tuesday but vowed to lobby for change to Israel's political system.

"We can't continue in this way. It [should not be] possible that the party in power will have less than a quarter of members of parliament," he said.

Early exit polls

Israel channel 1:
Kadima - 30 seats
Likud - 28 seats

Israel Channel 2:
Kadima - 29 seats
Likud - 27 seats
Yisrael Beiteinu - 15 seats
Labor - 13 seats
Shas- 10 seats
Others - 26 seats

Israel Channel 10:
Kadima - 30 seats
Likud - 28 seats

"You can't have governments that are always comprised of many parties and always require extreme compromise."

Shlomo Ben-Ami, a former Israeli foreign minister, told Al Jazeera that the exit-poll results spelled the "collapse of the Labor party".

However, if Livni does maintain her projected narrow lead and is selected to form a coalition government, she would seek to include Labor, he said.

"Her first choice [will be] to have as few parties as possible because as soon as you bring in the parties of the right, you have an unworkable government," Ben-Ami said.

"A typical national unity government would be Kadima, Likud, Lieberman and Labor, while discarding all the parties to the far right."

Noting that neither Livni nor Netanyahu could claim a "majority which could rally the Knesset", Ben-Ami criticised the Israeli election system as "an obstacle to solving the problems for the nation and the conflict with Palestinians and the Arab world".

Voter turnout on Tuesday was higher than expected, with more Israelis casting their ballot in the first few hours of voting than during the 2006 general election, electoral commission officials said.

Numerous opinion polls had indicated that voter turnout could sink to a record low.