Netanyahu scrambles to keep his job

Benjamin Netanyahu's rightwing Likud-Beitenu list has won the Israeli election by a narrow majority. Source: AAP

A BADLY weakened Prime Minister Benjamin Netanyahu is scrambling to keep his job after Israeli elections resulted in an unexpected deadlock.

The rightwinger is extending his hand to a new centrist party advocating a more earnest push for peace with Palestine.

With 99.5 per cent of the vote counted on Wednesday, the deadlocked election results defied forecasts Israel's next government would veer sharply to the right.

Israeli media said each bloc had 60 of parliament's 120 seats. Commentators said Netanyahu, who called early elections three months ago expecting easy victory, would be tapped to form the next government because the rival camp drew 12 of its 60 seats from Arab parties traditionally excluded from coalition building.

A surprising strong showing by a political newcomer, the centrist Yesh Atid party, dealt a setback to Netanyahu.

Yesh Atid's leader, Yair Lapid, has said he would only join a government committed to sweeping economic changes and a serious push to resume peace talks with the Palestinians, which have languished throughout Netanyahu's four-year tenure.

The results were not official, and the final bloc breakdowns could shift before the election committee finishes its tally early on Thursday.

With the blocs so evenly divided, there remains a remote possibility Netanyahu would not form the next government, even though both he and Lapid have called for the creation of a broad coalition.

Under Israel's parliamentary system, voters cast ballots for parties, not individual candidates. Because no party throughout Israel's 64-year history has ever won an outright majority of parliamentary seats, the country has always been governed by coalitions.

Traditionally, the party that wins the largest number of seats is given the first chance to form a governing alliance in negotiations centring on promising cabinet posts and policy concessions.

If those negotiations are successful, the leader of that party becomes prime minister. If not, the task falls to a smaller faction.

President Shimon Peres has until mid-February to set that process in motion, though he could begin earlier.

Netanyahu's Likud-Yisrael Beitenu alliance polled strongest in Tuesday's election, winning 31 parliamentary seats. But that is 11 fewer than the 42 it held in the outgoing parliament and below the forecasts of 32 to 37 in recent polls.

Yesh Atid had been projected to capture about a dozen seats but won 19, making it the second largest in the legislature.

Addressing his supporters early on Wednesday, when an earlier vote count gave his bloc a shaky, one-seat parliamentary margin, Netanyahu vowed to form as broad a coalition as possible.

He said the next government would be built on principles including reforming the contentious system of granting military draft exemptions to ultra-Orthodox Jewish men and the "responsible" pursuit of a "genuine peace" with the Palestinians. He did not elaborate, but the message seemed aimed at Lapid.

Netanyahu called Lapid early on Wednesday and offered to work together.

"We have the opportunity to do great things together," Likud quoted the prime minister as saying.

Lapid also called for the formation of a broad government.

The election results surprised Israelis, given the steady stream of recent opinion polls forecasting a solid hard-line majority and a weaker showing by centrists.

Lapid said the election outcome reflected a longing for unity in a country beset by schisms.

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