Israel`s election ended early Wednesday in political deadlock, with both main candidates for prime minister declaring victory and saying they would form the next government, according to Kansas City Star.
The inconclusive result opened the way to weeks of tough political bargaining on forming a governing coalition.
It was unclear whether Israel would emerge with a hawkish leadership opposed to trading occupied land for peace or a more centrist government prepared to negotiate a peace deal with the Palestinians.
A hard-line government in Israel would complicate a push by the Obama administration to reinvigorate Middle East peace efforts.
With nearly all the votes counted, the centrist Kadima party led by Foreign Minister Tzipi Livni had 28 seats in the 120-member parliament, with 27 won by the rightist Likud party led by Benjamin Netanyahu.
Overall, right-wing parties won more seats in the legislature, indicating that Netanyahu would have an easier task of forming a coalition with a parliamentary majority.
Under Israeli law, the president assigns the candidate he deems to have the best chance of enlisting a parliamentary majority with the task of forming a government.
President Shimon Peres is expected to take that step after the final election results are formally published in eight days and he consults with parliamentary factions on who should form the government.
The kingmaker of the future coalition may well be Avigdor Lieberman, leader of the ultra-nationalist Yisrael Beiteinu party, which won 15 seats and became the third-largest faction in parliament, bypassing the Labor party led by Defense Minister Ehud Barak, which fell to 13 seats.
Neither Livni nor Netanyahu would be able to form a majority coalition without Lieberman`s party, and he said in a speech to supporters that he was "not ruling anybody out," although "our preference is undoubtedly a right-wing government."
In separate victory speeches, both Netanyahu and Livni said they had won a popular mandate to become prime minister and both pledged to head broad-based coalitions with their rivals.
"The people of Israel have spoken loud and clear: The national camp led by the Likud has won a clear advantage," Netanyahu said, referring to the right-wing majority in parliament. "Our path has won and it is the path that will lead the people."
Livni told her cheering supporters that "the people of Israel have chosen Kadima" and "we will complete this mission by establishing a unity government under our leadership."
"The job is not done, but the public has decided," she added. "No one will deny the voters of Israel their wish. No one."
In a final push of hard campaigning, Livni erased a commanding lead held by Netanyahu for months in public opinion polls, but analysts said she would have a difficult task forming a coalition.
Her party`s natural allies on the left took a beating at the ballot box, most prominently the Labor party, once the ruling party in Israel, which has steadily fallen in popularity in recent elections.
Barak suggested in a concession speech that Labor might stay out of a future government and opt to rebuild itself in the opposition.
"We will not serve in a government that is not in accordance with our path," Barak said, "and we will not hesitate to go into the opposition and serve the people from there."
