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The same channel states that the alliance of the Blue Center, Gantz won more, 37 parliamentary seats, and Netanyahu's conservative Likud 33. But as the night went on, there were growing signs that Netanyahu's Likud was pulling ahead.

His close ally President Donald Trump, who has swung USA policy sharply in Israel's favour and openly backed Netanyahu, said the prime minister's victory gives the White House's long-awaited peace plan a "better chance".

"It will be a right-wing government, but I will be prime minister for all", he said. The president was on a flight to Texas. "He's been a great ally and he's a friend". It looks like that race has been won by him.

TRT World 's Ediz Tiyansan reports from Washington on how US President Donald Trump played his role in Netanyahu's likely win. The President can see the picture and should call on the victor to form the next government.

No party in the history of Israel has ever won enough seats to form a government, meaning the size of the blocs has a key role in the coalition building.

Yet the New York Times had declared the election a "setback" for Netanyahu, based on exit polls that showed Likud losing by a substantial margin to the opposition, led by former Israel Defense Forces (IDF) chief of staff Benny Gantz.

The closely-contested race was widely seen in Israel as a referendum on Netanyahu's character and record in the face of corruption allegations.

Israeli Attorney General Avihai Mandelblit had already served notice that he plans to indict Netanyahu on multiple counts of bribery and fraud.

At this stage, Netanyahu's Likud lost Caesarea with 52% of the vote going to Blue and White.

Netanyahu appeared poised for a historic fifth term as prime minister with almost all the ballots counted from Tuesday's vote.

"He's a magician!" the crowd chanted as fireworks flared and Netanyahu kissed his wife Sara.

Gantz told reporters Wednesday that the broad support for his centrist Blue and White party proves "the people want a different way and we are going to deliver it".

Is Netanyahu still prime minister?

Some analysts predict he may try to pass a law granting himself immunity, as a sitting leader, from trial.

Netanyahu's message of unity contrasted with his campaign theme in which he accused Gantz of conspiring with Arab parties to topple him.

- Hadash, headed by Ayman Odeh, is a secular Arab-led party with communist roots that ran with Ahmed Tibi's Taal.

Haredi Orthodox parties also succeeded on Tuesday.

During the campaign, Netanyahu sought to tap into Trump's popularity among Israelis, who delighted in his recognition of Jerusalem as Israel's capital in 2017 and transfer of the U.S. Embassy to the holy city last May from Tel Aviv.

The Palestinians demand a full return to the borders that existed before the 1967 war when Israel seized the West Bank, including East Jerusalem, and the Gaza Strip.

An aide to Palestinian President Mahmoud Abbas says the outcome of Israel's election raises Palestinian fears about an Israeli annexation of parts of the occupied West Bank.

The latest results indicate that Naftali Bennett and Ayelet Shaked's the New Right party has received some 127,000 votes, putting them some 4,300 votes (and 0.11%) below the 3.25% threshold and making them the only party with a chance to still enter the 21st Knesset.

Whether or not he will follows through, his next government will further tighten Israel's grip on the territories, to prevent any prospects of a viable Palestinian state.

Trump is expected to finally present a long-delayed peace proposal in the coming months.