Public opinion appears divided on eve of poll over future of PM facing prospect of being indicted in corruption cases.
Netanyahu, who became Israel’s longest-serving prime minister in July, is seeking a record fifth term in office. He is competing against his toughest challenger in years, former army chief Benny Gantz, leader of the centrist Blue and White party.
According to the first round of exit polls, which are unofficial and can be unreliable, Netanyahu and his right-wing coalition bloc have failed to secure the 61-seat majority they needed.
Two exit polls put Gantz’s party in a narrow lead. A Channel 12 exit poll said it would win 34 seats, with Netanyahu’s Likud one seat behind. The poll had Arab Joint List – an alliance of four Palestinian parties – winning 11 seats with eight for former Defence Minister Avigdor Lieberman’s far-right Yisrael Beiteinu.
Meanwhile, an exit poll on Channel 13 put Likud at 31 seats, trailing Gantz’s party by two seats.
Official preliminary results will be announced on Wednesday, with final results due on September 25.
Speaking to cheering supporters in Tel Aviv early on Wednesday, Gantz said it was necessary to wait for the official results, but was clearly confident.
“Netanyahu has not been successful in what he set out to do,” he told the crowd. “We, on the other hand, proved that the idea called Blue and White – a venture we started a little over six months ago – was successful.“
Speaking shortly afterwards, Netanyahu took the stage at Likud’s party headquarters in Tel Aviv.
He told his supporters that coalition talks had already begun.
“Israel is entitled to a strong government, a stable government, a government that ensures Israel is the nation of the Jewish people, and that it cannot, will not, be a government which is formed of parties which hate the nation,” he said, apologising for a croaky voice and sipping on water.
Majdi Halabi, an analyst and expert on Israeli affairs, said the initial unofficial results were a “slap in the face” for the prime minister.
Some 31 parties were competing for the 120 seats in the country’s 22nd Knesset.
Although many observers expected election fatigue to set in as voters headed to the polls for the second time in less than six months, early turnout was the highest in decades and long queues formed during the afternoon on Tuesday outside polling stations in the capital Tel Aviv.
The more than 11,000 polling stations across the country closed at 10pm (19:00 GMT).
Israel’s election commission says the final turnout was 69.4 percent, compared with 68.5 percent in April, with a total of 4,440,141 votes cast.
Netanyahu rallied his supporters throughout the day, using various social media platforms, phone messages, and direct engagement with voters on the streets of several major cities.
“We are fighting to the last minute. Every vote is important. Get out and vote for Likud. Bring everyone you can to the ballot box,” Netanyahu told his followers via Twitter in the final hour before voting closed.
Netanyahu is also facing a pretrial hearing in connection with three separate corruption cases – bribery, fraud and breach of trust. He denies any wrongdoing.
In a statement, Israeli police said they had detained or arrested 20 people for various offences, including one man in the Negev Region who allegedly tried to disrupt voting at a polling station.
Coalition governments are the norm in Israel as no single party has won a majority of seats in the Knesset and the negotiations ahead are likely to be difficult.
Lieberman has said he would not join an alliance that included ultra-Orthodox parties – Netanyahu’s traditional partners.
Gantz has ruled out participating in an administration with Netanyahu if the veteran politician is indicted on the corruption charges.
Israel’s President Reuven Rivlin will decide who will be given the mandate to form a new government – usually the leader of the party that wins the most seats.
If Rivlin thinks this person is unlikely to garner enough support from smaller parties to control at least 61 seats in the Knesset, he may give the task to someone else.
“If Netanyahu doesn’t clear the 61-seat threshold, Rivlin may still give him the mandate to form a government,” Eli Nissan, an Israeli political analyst told Al Jazeera.
“But if he fails to form a government within the next few weeks – like what happened after the April vote – the President may give Gantz the opportunity to do that instead,” he added. “If he fails as well, the president may push for a unity government.”
Israel has not had a unity government since Netanyahu came to power in 2009.
According to experts, voter turnout among Palestinian citizens of Israel was expected to be higher than the April vote which saw only 49.2 percent of eligible voters among Palestinians cast their ballot.
“There was a higher voter turnout among Palestinian citizens this time, most of whom voted for the Arab Joint List,” said Haifa-based analyst Diana Buttu.
“We also saw a large number of Jewish voters support the Joint List,” she added referring to the alliance which had split into two competing groups in April but regrouped again in advance of this election.
Oudeh Bisharat, a Nazareth-based political analyst, agreed.
“Palestinian voters went out in bigger numbers this time because the Arab Joint List was united again and because they wanted to challenge Netanyahu’s racism and incitement against them,” Bisharat told Al Jazeera.