In a dramatic victory against all odds, Prime Minister Benjamin Netanyahu today secured a stunning win in Israel's closely-fought general election following a last-minute shift on Palestinian statehood, as he appeared set to become the country's longest-serving premier.
"Against all odds, we achieved a great victory for the Likud," Netanyahu told supporters, declaring victory even before final results were formally announced.
"I am proud of the people of Israel, who in the moment of truth knew how to distinguish between what is important and what is peripheral, and to insist on what is important," he said.
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Netanyahu, 65, fought an all-out battle for a record fourth term against a spirited, united opposition based on a campaign revolving around no compromise attitude on Palestine's statehood.
Netanyahu, who has been in power for nine years over three terms, was pitted against 54-year-old Herzog, who had promised to repair ties with the Palestinians and the international community and also deal with middle class issues such as price rise.
In a last-ditch effort to woo right-wing voters, Netanyahu ruled out a Palestinian state just a day before the election, backtracking from his own six-year-old policy.
Analysts said Netanyahu's campaign seems to have worked as Herzog's centrist Zionist Union was ahead in the recent opinion polls by about four seats in the Knesset.
The Joint List of Arab parties emerged as the third- largest party with 14 mandates in the election in which 65.7 per cent of the nearly 5.89 million eligible voters participated.
Israel's ballots are for political parties rather than individual candidates. No party has ever won a majority, but the victory goes to the party leader most suited to put together a 61-seat majority with coalition parties.
While a new government must be negotiated through the president's office, the results increase Netanyahu's ability to form a majority coalition out of the 120 seats.
Likud said in a statement that Netanyahu intended to form a new government within weeks and negotiations were already underway with leaders of smaller parties he saw as likely coalition partners.