The final tally in Israel's general election shows Prime Minister Benjamin Netanyahu's right-wing party Likud won by just five seats.
With 99.5 per cent of votes now counted, Likud claimed 29 seats in the election, while the leftist opposition - Zionist Union - won 24 of the 120-seat Knisset.
A coalition of right-wing politicians will now be formed over the coming weeks.
Israel's opposition leader has officially conceded in the country's hotly-contested general election.
Isaac Herzog, leader of the leftist Zionist Union party, said he had spoken to Prime Minister Benjamin Netanyahu and had congratulated him on the victory of his right-wing Likud party.
A few minutes ago I spoke with Prime Minister Benjamin Netanyahu and congratulated him on his achievement and wished him luck.
Despite exit polls showing the two parties as almost level, Mr Netanyahu has claimed a win and has invited other right-wing politicians to join him in a coalition government.
The final results of the Israeli election show a resounding victory for Prime Minister Benjamin Netanyahu's Likud party, the Associated Press reports.
Benjamin Netanyahu's main challenger, Isaac Herzog, has disputed the prime minister's claim of victory in Israel's election, saying, "Everything is open".
"This result allows us to return to power," Herzog told supporters at his party's headquarters in Tel Aviv.
"We will wait for the real results ... everything is open", he said.
Israeli Prime Minister Benjamin Netanyahu said he had invited other right-wing politicians to join him in a coalition government "without delay".
"Reality does not take a break," Netanyahu said in a speech to supporters after two television exit polls gave Likud a narrow lead over his centre-left challenger in the ballot.
Challenger to Prime Minister Benjamin Netanyahu, Isaac Herzog has said that "everything is open" in the election results.
He responded to Netanyahu's tweet of a "major victory" for Likud in the election.
Official results are not expected to be released until at least Wednesday morning.
Israeli Prime Minister Benjamin Netanyahu has tweeted that his party has won "a major victory for the people of Israel".
The tweet, in Hebrew, read: "Against all odds: A great victory for the Likud, a major victory for the national camp led by the Likud, a major victory for the people of Israel."
No official statement on behalf of the Israeli Prime Minister has been released.
Against all odds:a great victory for the Likud. A major victory for the people of Israel!
Exit polls in Israel show that Prime Minister Benjamin Netanyahu's Likud party drew even with Isaac Herzog's Zionist Union in the election.
The polls, by Israel's leading television channels, suggest that the formation of the next government could be a serious challenge for both candidates.
Channel 10 and Channel 1 said Likud and the Zionist Union had secured 27 seats each in the 120-member Knesset.
But Channel 2 said that Netanyahu had eked out a narrow victory, winning 28 seats to 27 for Herzog.
Final results are expected early on Wednesday morning.
Israeli Labour Party leader Isaac Herzog, the man hoping to prevent Prime Minister Benjamin Netanyahu from becoming Israel's longest-serving leader, has cast his vote in the election for country's the next parliament.