The outcome of Tuesday's elections guaranteed Binyamin Netanyahu a second consecutive term as prime minister but a weaker mandate. Talks to form the next coalition will begin Wednesday and are expected to last several days.
The biggest surprise of Tuesday's elections was newcomer to politics, former journalist Yair Lapid whose Yesh Atid party became the country's second largest, with exit polls predicting 19 seats in the next Knesset. The Labor party according to initial estimates won 17 seats. Another political newcomer, Naftali Bennet's Jewish Home party was projected to win 12 seats, Shas 11 and Tzipi Livni's Hatnua party 7 seats, Israel's three television stations said in exit polls broadcast at 10 p.m. as polls closed.
The exit polls give the right-wing bloc 61 seats and the left-wing bloc 59 in the next Knesset.
Commenting on the initial results, Education Minister Gideon Sa'ar of Likud-Beitenu party called on all the Zionist parties to join in forming the next government. Speaking on Channel One Sa'ar said the exit polls indicate Netanyahu will form the next government but stressed a strong right bloc is need to face the political and economic challenges ahead.
However, Channel One described Netanyahu as the biggest loser, saying the election outcome will force him to turn to Lapid's party, considered a central left-wing party to form the next government.
Israel's Central Election Committee said the 2013 elections boasted a record turnout, with more than 3.6 million of the 5.65 million eligible Israelis casting votes, 4 percent more than in the 2009 elections.
Tuesday was declared a national holiday. Many Israelis voted early and enjoyed the rest of the day shopping or touring the country, Israel Radio said.
Official results were to be published Jan. 29 but local media were expected to report exit polls shortly after voting closes.
Netanyahu called early elections in October after his coalition failed to agree on an annual budget.