After an apparent election setback, Prime Minister Benjamin Netanyahu said he will seek the formation of a new Zionist government that excludes Arab parties.
Netanyahu was addressing a small crowd of supporters in Tel Aviv at 3:30 a.m. on Wednesday, more than five hours after voting ended.
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Initial exit polls placed challenger Benny Gantz's Blue and White party just ahead of Netanyahu's Likud, hurting Netanyahu's chances of remaining as prime minister.
Exit polls are often imprecise, and Netanyahu said he would wait for official results before making conclusions.
But he said he would not allow the formation of a new government that relies on Arab anti-Zionist partners: "There will not be and there cannot be a government that leans on Arab, anti-Zionist parties."
Netanyahu's chief challenger, Benny Gantz, meanwhile, said it was too early to declare a victory in the national elections.
Neither party appears to have enough support to form a majority coalition in parliament with their traditional allies, raising the possibility they will have to form a broad unity government.
Addressing supporters in Tel Aviv, Gantz says he will wait for formal results before making any bold pronouncements. But he says he's already begun talking to potential allies. He made no mention of Likud.
"I am ready to speak to everyone," he said.
According to the Central Elections Committee, 69.4% of eligible voters cast ballots in the unprecedented repeat election, a slightly larger number than took part in April's vote.
The commission says 4,440,141 votes were cast by the time polls closed in Tuesday's elections, which were widely seen as a referendum on Netanyahu, who has been in power for more than a decade.
Initial exit polls showed Netanyahu did not have enough support to form a right-wing majority coalition, potentially spelling the end of his political career.
Meanwhile, Yisrael Beytenu party chief Avigdor Lieberman, who is poised to be the kingmaker in Israel's election, says there is only "one option" for the country: a unity government between him and the two largest parties.
Initial exit polls published after Tuesday's vote showed neither Likud or Blue and White able to form a majority coalition without Lieberman's support.
In a speech to his supporters, Lieberman said the only choice is for the two large parties to join him in a broad, secular coalition that would not be subject to the demands of ultra-Orthodox Jewish parties.
Israeli polls are often imprecise. But if the final results are similar, Lieberman's call would set the stage for complicated negotiations.
Joint Arab List Chairman Ayman Odeh, meanwhile, said initial exit polls indicated his list would be the third-largest bloc in the next Knesset, marking a "historic" moment for the sector.
Initial exit polls released by Israel's three main TV stations indicated that the Joint Arab List had won around a dozen seats in the 120-seat Knesset.
Odeh said that if the final results matched the exit polls, Arab voters would have "prevented Netanyahu from forming a government."
