Israeli election: Long coalition talks expected as Netanyahu, Gantz deadlocked with nearly all votes counted

Israel's two main political parties were deadlocked on Wednesday after an unprecedented repeat election, with Prime Minister Benjamin Netanyahu facing an uphill battle to hold on to his job.

The election's seeming political kingmaker, Avigdor Lieberman, said he'll insist upon a secular unity government between Netanyahu's Likud and Benny Gantz's Blue and White parties, who based on partial results are currently tied at 32 seats each out of the 120 in parliament.

Without Lieberman's endorsement, both parties appear to have fallen well short of securing a parliamentary majority with their prospective ideological allies.

With results still pouring in, Lieberman insisted the overall picture was unlikely to change. He also demanded a secular "liberal" government shorn of the religious and ultra-Orthodox allies the prime minister has heavily courted.

"The conclusion is clear, everything we said throughout the campaign is coming true," he said outside his home in the occupied West Bank settlement of Nokdim.

"There is one and only option: a national unity government that is broad and liberal and we will not join any other option."

Netanyahu's Likud, with its natural allies of religious and ultra-nationalist parties, mustered just 56 seats — or five short of the needed majority

That could spell serious trouble for the continuation of Netanyahu's lengthy rule.

The mainly Palestinian Joint List alliance was set to become the third-largest force in parliament with 12 seats, Israeli media reported.

That could put the Palestinian parties in position to block Netanyahu from continuing as prime minister if they decided to break with precedent and endorse Gantz for the job.

Israel's Palestinian parties have traditionally not endorsed anyone for prime minister.

Gantz, a former military chief, has ruled out sitting with a Netanyahu-led Likud at a time when the prime minister is expected to be indicted on corruption charges in the coming weeks.

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It raised the spectre of an alternate Likud candidate rising to challenge Netanyahu, though most of its senior officials have pledged to stand solidly behind their leader.

Netanyahu, the longest serving leader is Israeli history, had desperately sought an outright majority with his hard-line and ultra-Orthodox allies in hopes of passing legislation to give him immunity from his expected indictment.

Israel's attorney general has recommended charging Netanyahu with bribery, fraud and breach of trust in three scandals, pending a long-awaited hearing scheduled in the coming weeks. A formal indictment would increase the pressure on Netanyahu to step aside if he does not have immunity.

The partial results released Wednesday by the Central Election Commission were based on 44 percent of the vote counted. The three Israeli TV channels reported the same outcome, based on more than 90 percent of the vote counted, but did not explain the discrepancy with the commission's official release.

According to the partial results, Likud with its natural allies of religious and ultra-nationalist parties mustered just 56 seats - or five short of the needed majority.

Gantz's Blue and White and its centre-left allies garnered 55 seats, putting Lieberman's Yisrael Beiteinu and its nine seats placed in the middle as the deciding factor.

In his first comments Wednesday morning outside his home, Gantz said he had already begun working toward forming a "unity government" but urged patience until the final results were announced.

Focus will then shift toward Israel's president, Reuven Rivlin, who is tasked with selecting the candidate he believes has the best chance of forming a stable coalition.

Rivlin is to consult with all parties in the coming days before making his decision.

Lieberman's recommendation will carry a lot of weight regarding who will be tapped as the prime minister designate.

The candidate would then have up to six weeks to form a coalition.

If that fails, Rivlin could give another candidate for prime minister 28 days to form a coalition. And if that doesn't work, new elections would be triggered yet again. Rivlin has said he will do everything possible to avoid such a scenario and Lieberman has ruled it out as well.

Lieberman's primary stated goal is to push out what he sees as the excessive power of the ultra-Orthodox Jewish parties and have wide a coalition that can effectively tackle Israel's most pressing security and economic challenges.

But Netanyahu accused his former ally of plotting to oust him from office out of personal spite.

Behind the two is decades of a roller-coaster relationship. Lieberman, once Netanyahu's chief of staff, has held a series of senior Cabinet posts and was often a staunch partner. But he's has also been a rival, critic and thorn in Netanyahu's side.

The Moldovan-born Lieberman started as a top Netanyahu aide in the 1990s before embarking on a political career of his own as a nationalist hard-liner and champion of immigrants like the former Soviet Union like himself.

But he resigned last year as defence minister because Netanyahu kept blocking his plans to strike hard against Palestinian militants in Gaza.

Lieberman passed up the chance to return to the post following April's election, refused to join Netanyahu's emerging coalition and forcing the do-over vote. Assuming he sticks to his guns this time as well, Netanyahu could be done as Israel's prime minister.

Agencies contributed to this report.