Israeli rivals claim election win

The leaders of Israel's two main parties have claimed victory in a snap general election.

With most votes counted, results are still unclear. But Benjamin Netanyahu of the centre-right Likud said the "nationalist camp" had won.

But Tzipi Livni, leader of the governing centrist party Kadima, said she was ready to lead the country.

Exit polls give Kadima 30 seats to Likud's 29. Both would need the support of smaller parties to form a coalition.

Ultra-nationalist Yisrael Beitenu is forecast to be third.

The projections would push the Labour party - led by Defence Minister and former Prime Minister Ehud Barak - into an unprecedented fourth place.

livni: "We won the confidence of the people"

Final results will come within days.

Likud had held a solid lead in opinion polls prior to the election, but Kadima closed the gap in the final days.

Cheers erupted at Kadima's headquarters as the exit polls were announced on Israeli TV.

"Today the people chose Kadima," Ms Livni later told crowds of ecstatic supporters.

"The land of Israel does not belong to the right, just as peace does not belong to the left."

Ms Livni appealed to Mr Netanyahu to join a national unity government that she would lead.

Kingmaker

But even if the exit polls are proved right, the strong showing by right-wing rivals will make it difficult for Ms Livni to form a coalition government, analysts say.

Several smaller parties, whose support Ms Livni would need, are opposed to some of her policies, especially her pledge to exchange land for peace with the Palestinians.

Mr Netanyahu claimed victory, saying a Likud-led coalition would lead Israel.

"With God's help I will lead the next government," he told cheering crowds at Likud's Tel Aviv headquarters.

On the basis of the exit polls, analysts predict that Likud and various nationalist parties will between them control 65 of 120 seats in the Knesset.

BBC diplomatic correspondent Jonathan Marcus says the closeness of the forecasted result is in many ways the worst outcome for Israeli democracy, as it sets the scene for days and probably weeks of fractious political horse-trading.

Likud looks to have already sown up a deal with the strongest of the orthodox Jewish religious parties - Shas - ahead of the election, our correspondent adds.

Corruption probe

Once the final results are in, President Shimon Peres will consult with party leaders to determine who among them stands the best chance of forming a coalition government, but he does not have to choose the leader of the largest party.

The chosen party leader has then up to 42 days to form a coalition. If the attempt fails, Mr Peres can ask another leader to assume the task.

Much will depend upon what the Yisrael Beitenu leader Avigdor Lieberman tells the president, and which way he leans may be decisive in determining who is the first to be asked to try to form a coalition government, our correspondent says.

Elections were called early after Ms Livni failed to form a new government following Prime Minister Ehud Olmert's decision to step down last year amid a corruption probe against him.

Mr Olmert will stay on as caretaker prime minister until a new government is formed.

The election has been dominated by security issues following Israel's offensive in the Hamas-ruled Gaza Strip.

Although the Palestinian Authority has not expressed preference for any candidate, its senior negotiator, Saeb Erakat, expressed dismay that right-wing parties had performed so well.

"It is obvious the Israelis have voted to paralyse the peace process," he said.