According to television exit polls, prime minister Binyamin Netanyahu has a path to clinching an unprecedented sixth term, but it all depends on the right-wing Yamina party.
Neither the pro-Netanyahu nor the anti-Netanyahu camps succeeded in clinching a majority in the 120-seat Knesset.
The polls give Mr Netanyahu's Likud party 33-31 seats, way ahead of the second biggest party, the centrist Yesh Atid with 16-18 seats. The pro-Netanyahu bloc, Mr Netanyahu's Likud, two ultra-Orthodox parties and the extreme-right Religious Zionist party, have a combined 54 seats.
The anti-Netanyahu bloc has 59 seats but is comprised of parties from the right, centre and left and the Arab Joint List and it is difficult to see all these parties joining together in a viable coalition.
Yamina, which refused to commit to either joining a Netanyahu coalition or an anti-Netanyahu bloc, won seven seats and can now grant Mr Netanyahu a wafer-thin 61 majority.
Mr Netanyahu will be super generous in the coalition negotiations with Naftali Bennett and is expected to make him an offer he can’t refuse.
Likely outcome
Such a scenario, granting Mr Netanyahu, already Israel’s longest-serving prime minister, another term, is the most likely outcome but it’s not a done deal.
A key factor of Israel’s fourth election in two years was the particularly low turnout in Arab towns and villages. In the last election the Arab Joint List won 15 seats: on Tuesday, according to the TV exit polls, they won only eight seats, with another Arab party, Ra’am, which split from the Joint List last month, failing to pass the 3.25 per cent electoral threshold.
The final results should be in by Friday and only after consultations with party leaders will President Reuven Rivlin next month grant the mandate to form the next government to the candidate he believes has the best chance of forming a coalition, with Mr Netanyahu the most likely option.
Israel’s successful Covid-19 vaccination campaign and the normalisation of ties with Arab states were undoubtedly key factors contributing to Mr Netanyahu’s popularity.
Narrow coalition
Although it appears that Mr Netanyahu has won the election, his majority will be wafer-slim.
Nahum Barnea, a veteran commentator for Israel’s biggest-selling daily Yediot Aharonot, warned of the dangers of such a narrow coalition which depends on the extreme right and the ultra-Orthodox parties.
"When the Religious Zionist Party controls the government's fate it means freedom for Jewish terrorists to operate in the West Bank; it means destroying the justice system; it means apartheid within Israel; racial separation at hospitals, universities, the civil service and the army; gender discrimination; and enforcing religious codes. They aren't playing around."
Mr Netanyahu’s opponents fear if he wins another term he will curb the influence of the judiciary and even move to cancel his corruption trial, which resumes with the witness stage in two weeks’ time. He is accused of bribery, fraud and breach of trust but denies all the charges, claiming he is the victim of a left-wing witch hunt.