Benjamin Netanyahu swept to a stunning election victory on Wednesday, securing a third straight term for an Israeli leader who has deepened tensions with the Palestinians and infuriated key ally Washington.
After a closely-fought campaign, Netanyahu's rightwing Likud party confounded the polls to win 30 of the 120 seats in parliament against 24 for the centre-left Zionist Union.
It was a victory which Netanyahu himself described as "against all the odds", proving him once again to be Israel's master of political brinkmanship.
But the prospect of new term for the hawkish incumbent, who lurched further to the right during the campaign is likely to cast a long shadow over Israel's shattered relationship with the Palestinians and its strained ties with the US administration.
Although the Palestinians had harboured little illusion the vote would bring about any fundamental change, they said the prospect of yet another Netanyahu government would spur them to accelerate their already-advanced diplomatic campaign for statehood.
"Israel chose the path of racism, occupation and settlement building, and did not choose the path of negotiations and partnership between us," senior Palestine Liberation Organisation official Yasser Abed Rabbo told Agence France Presse.
And chief Palestinian negotiator Saeb Erakat pledged to "speed up, pursue and intensify" all diplomatic efforts, including an imminent move to lodge a complaint against Israel for alleged war crimes at the International Criminal Court in The Hague.
Netanyahu had put security at the forefront of his campaign, arguing he is the only one capable of ensuring Israel is never threatened by a nuclear Iran and vowing never to allow the Palestinians to establish a capital in east Jerusalem.
In a last-minute appeal to the far right, he ruled out the establishment of a Palestinian state if reelected, effectively reneging on his 2009 endorsement of a two-state solution.
He also pledged to build thousands of homes for Jewish settlers in annexed Arab east Jerusalem to prevent future concessions to the Palestinians.
By contrast, Zionist Union leader Isaac Herzog had pledged to resume talks with the Palestinians in a bid to end the conflict.
- A stunning turnaround -
In Tel Aviv, Herzog conceded defeat and congratulated the premier on winning a third consecutive term.
Netanyahu will form a new government "within two to three weeks," his party said, adding that he had already spoken overnight with rightwing and religious party leaders whose support he will need to form a majority coalition.
Under Israeli law, the final election results must be published within eight days of the vote, but a spokesman for the Central Elections Committee told AFP they would be out "on Thursday afternoon."
From that point, President Reuven Rivlin has seven days to entrust one party leader -- almost certainly Netanyahu -- with the job of forming the next government.
"The president has made clear that Israel needs a government as soon as possible, and therefore is keen to begin consulting with the parties' representatives as soon as possible," a spokesman for his office told AFP.
Under Israel's electoral system, the prime minister is not the leader of the party that gains most seats but whoever can build a coalition commanding a majority of at least 61 seats in parliament.
Netanyahu is likely to favour a narrow rightwing coalition but for that he will need the support of Israel's latest kingmaker -- Moshe Kahlon, a Likud exile whose newly formed centre-right Kulanu party won 10 seats.
"Netanyahu will resist efforts to establish a (unity) government, as he is most comfortable in right-wing governments surrounded by a collection of conservative satellites," the Jerusalem Post said.
"The man who can impose a unity government is Kahlon."
The result was a stunning turnaround for a party which had been seen trailing the Zionist Union by up to four seats in a series of opinion polls published last week.
"Netanyahu has done it. He has managed to catch up in the final lap," said Claude Klein, a specialist in constitutional law at Jerusalem's Hebrew University.
"On paper, Isaac Herzog has no chance of putting together a majority which would depend on the support of the Arab List which includes openly anti-Zionist MPs."
The Joint List, which groups the main Arab parties, made a strong showing with 14 seats, making it the third largest bloc in parliament.
Netanyahu had seized on the high turnout among Israel's Arab minority to issue a dramatic polling day appeal to his supporters to get out and vote, warning: "The rule of the right wing is in danger."
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