Millions in Israel are voting in
what is expected to be a close race between Prime Minister Benjamin
Netanyahu's party and a centre-left alliance.
The centre-left Zionist Union promises to repair relations with Palestinians and the international community.
Mr
Netanyahu, whose party has trailed in opinion polls, vowed on Monday
not to allow the creation of a Palestinian state if he wins a fourth
term.
The economy and living standards have emerged as key issues.
Polls opened at 07:00 (05:00 GMT) and are due to close at 22:00.
Results
could be declared soon afterwards, but a lengthy period of negotiations
over the formation of the next coalition government may follow.
No party has ever won an outright majority under Israel's
proportional representation voting system, and neither side is expected
to get more than a quarter of the votes in Tuesday's election.
Mr Netanyahu, 65, called early elections late last year, in an attempt to form a more stable coalition.
Opinion
polls published before the weekend suggested that the Zionist Union was
likely to win the most seats, though it may still be possible for Mr
Netanyahu to form a coalition government even if his Likud party fails
to top the poll. At the scene: Kevin Connolly, BBC News, Tel Aviv
Likud officials are preparing in a huge auditorium for a celebration that they can't be sure they'll be in a position to hold.
Of
course it isn't over 'til it's over so the bunting, the pumping disco
music and the giant video backdrop showing the great and good of the
party may not go to waste.
The talk here is of Mr Netanyahu's plan to make a last-minute
television appeal and the way in which it was overruled by the national
electoral commission.
Would it have looked a little desperate or
did Mr Netanyahu calculate that it would be banned, outraging supporters
who'd then be motivated to vote at the last minute?
Whatever the thinking, it's given the closing hours of this long campaign a twist of drama. An end for Netanyahu, or a new era? Will the peace process be revived? Follow BBC election reporters on Twitter As Mr Netanyahu cast his vote on Tuesday, he ruled out forming a coalition with the Zionist Union.
"There will not be a unity government with Labour. I will form a nationalist [right-wing] government," he said.
He also posted a video message on his Facebook page, saying:
"Right-wing rule is in danger. Arab voters are going to the polls in
droves. Left-wing organisations are bringing them in buses."
Zionist Union leader Yitzhak Herzog said his rival represented the "path of despair and disappointment".
Mr
Herzog told the BBC that his government would work to "correct the
unfairness in [Israel's] economy", strengthen the country's relationship
with the US and revive negotiations with the Palestinians.
He
expressed support for a two-state solution, saying: "It's very important
for the future of Israel that we separate from the Palestinians.
"We must find the right partners to negotiate with them."
The main players
Benjamin Netanyahu: Victory for his Likud party could
mean a fourth term for the veteran of Israeli politics. His hawkish
stance on the Palestinians and Iran have made him popular with the right
but a divisive figure.
Yitzhak Herzog: The co-leader of the centre-left
Zionist Union electoral alliance, Mr Herzog has accused Likud of
depressing Israeli living standards and campaigned against Mr
Netanyahu's foreign policy. He has tried to counter Mr Netanyahu's
accusations he is "soft" by pointing to his special forces background.
Tzipi Livni: Mr Herzog's co-leader in the Zionist
Union, Ms Livni is a prominent advocate of seeking more co-operation
with the Palestinian Authority.
Moshe Kahlon: A former Likud welfare and communications
minister under Benjamin Netanyahu, Mr Kahlon's centre-right Kulanu
party could play kingmaker in a coalition.
Who are the key candidates? By
18:00 voter turnout stood at 54.6%, slightly below the figure for the
last election in 2013, the Central Elections Committee reported.
Many
of the candidates have concentrated on Israel's socio-economic
problems, including the high cost of living and slow economic growth.
Yohanan
Plesner, President of the Israel Democracy Institute, a think tank,
told the BBC that many voters felt that politicians had been dodging
"the real issues that they care about, which is cost of living and
mainly cost of housing".
The prime minister has consistently accused his centre-left
challengers of being willing to relinquish Israel's claim to Jerusalem
as its indivisible capital in peace talks with the Palestinians.
On
Monday, he made his pledge to prevent the creation of a Palestinian
state in a speech at the Har Homa Jewish settlement in East Jerusalem.
Palestinians
seek East Jerusalem - occupied by Israel since the 1967 Middle East war
- as the capital of a future Palestinian state.
Another term for
Mr Netanyahu would mean more scepticism on a peace deal with
Palestinians and a strong focus on strategic security issues like Iran's
nuclear threat, the BBC's Kevin Connolly reports from Jerusalem.
Mr Herzog has accused Mr Netanyahu of "panicking".
Visiting
the Western Wall, one of the holiest sites in Judaism, on Sunday, he
pledged to "safeguard Jerusalem and its residents in actions, not just
words, more than any other leader".
Israel election
Nearly six million Israelis voting for a new parliament (Knesset)
Votes are cast for a party, rather than individual candidates
120 seats up for grabs, though electoral system means no single party will achieve a majority
Blocs of parties must command at least 61 seats to form a government
President has seven days in which to appoint an MP with best chance of forming a government
Candidate has initial 28 days to put workable coalition together
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