But while Mr Netanyahu claimed a "great victory", Israeli President Reuven Rivlin - himself a Likud stalwart - is advocating for a national unity government including both major parties. "I am convinced that only a unity government can prevent the rapid disintegration of Israel's democracy and new elections in the near future," Mr Rivlin said.

In a statement from Likud released on Wednesday morning local time, the party said "the prime minister spoke with all the party leaders who will take part in the new coalition". That included Jewish Home's Naftali Bennett, Kulanu's Moshe Kahlon, Yisrael Beitenu's Avigdor Lieberman, Shas' Aryeh Deri, and Yaakov Litzman and Moshe Gafni from United Torah Judaism.

A statement from the Zionist Union's leaders, Isaac Herzog and Tzipi Livni, said: "This is not an easy morning for us and for those who believe in our way."

Trailing in the polls until the day of the election, Mr Netanyahu pulled out all stops to lure right-wing voters away from Israel's smaller, hardline parties. In an extraordinary Facebook video released after voting had begun, he issued what has been widely criticised as an ugly, racist warning: "The right-wing government is in danger. Arab voters are coming out in droves to the ballot booths."

That followed his vow that if he came to power again, there would be no possibility of a Palestinian state and that settlement construction in the occupied West Bank and East Jerusalem - considered illegal under international law - would grow.

Such statements, while they appear to have drawn right-wing voters to his camp, will have done nothing to heal the deepening diplomatic rift with Israel's key foreign partner, the United States, or to calm the concerns of European Union countries over the continued failed peace process with the Palestinians.

The Zionist Union's Shelly Yachimovich described Mr Netanyahu's comments as "horrendous". "No Western leader would dare utter such a racist comment," she wrote on her Facebook page. "Imagine a prime minister/president in any democracy who would warn that his rule is in jeopardy because, eg, 'Black voters are coming in droves to the polling stations'."

In their statement on the results, Mr Herzog and Ms Livni vowed to "lead the fight . . .  for social justice, diplomatic horizon, equality and democracy in [the] hope that we can maintain a just, safe Jewish and democratic state".

The Joint List, a coalition of parties favoured by Arab voters, won 14 seats, positioning them to be a third force in Israeli politics.

For Mr Netanyahu to form a coalition, analysts say he will need the support of oshe Kahlon, whose recently-formed Kulanu party captured nine or 10 seats. Mr Kahlon, whose campaign focused almost entirely on cost of living issues such as housing affordability, has so far refused to reveal his intentions. "I am loyal to my way," he told supporters after the polls closed, vowing to work to form a government committed to social justice.

Likud Minister Silvan Shalom said the Israeli public had sent a clear message. "The results were a very clear 'yes' to Prime Minister Netanyahu and Likud to carry on leading. His results were very strong and beyond all the polls taken in the last few weeks.

"I know very many Israelis came out to vote Likud to keep the national camp and right wing in power and not allow the left wing to take power," he said.

Ahmed Tibi, who was standing on the Joint List, said: "It is disappointing that the public did not want to change the reality."

The leader of the left-wing Meretz party, Zehava Galon, announced she would resign from the Knesset and hand leadership to her colleague Tamar Zandberg if her party did not reach the four-seat threshold.

Whoever forms government needs to build a coalition of at least 61 seats to control the 120-seat Knesset, however analysts say Mr Netanyahu will be aiming for a bigger buffer to ensure this government lasts longer than the previous one, which served just under two years of a four-year term.

The official results are due out Thursday, and parties now have several weeks to present a coalition proposal to Mr Rivlin for his endorsement.