Exit polls following Israel's second general election in five months suggest the result is too close to call.
The centrist Blue and White alliance of former military chief Benny Gantz is projected to win between 32 and 34 seats, and PM Benjamin Netanyahu's right-wing Likud party 30 to 33 seats.
Yisrael Beiteinu party leader Avigdor Lieberman may end up being kingmaker.
Mr Netanyahu called the snap vote after failing to form a governing coalition in the wake of an election in April.
Negotiations on the formation of a new coalition are expected to start as soon as the preliminary results come on Wednesday morning.
Speaking to supporters early on Wednesday, Mr Netanyahu said: "We've all been through a difficult election campaign.
"We are still waiting for the actual results but one thing is clear. The state of Israel is at a historical point, we faced great opportunities and great challenges."
Mr Gantz sounded more optimistic when he spoke to supporters a little earlier.
"Of course we'll wait for the real results, but it seems we have accomplished our mission," he said."The unity and reconciliation is ahead of us."
