Benjamin Netanyahu’s Likud Party wins in Israel

Israeli Prime Minister Benjamin Netanyahu greets supporters at the party's election headquarters In Tel Aviv. Picture: AP

With nearly all the votes counted, Likud appeared to have earned 30 out of parliament’s 120 seats.

Exit polls had shown a tight race with the opposition Zionist Union but it wound up with just 24 seats.

Mr Netanyahu will now have a relatively easy time putting together a coalition government with right-wing and religious allies.

The election was widely seen as a referendum on Mr Netanyahu, who has governed the country for the past six years.

Recent opinion polls indicated he was in trouble, giving chief rival Isaac Herzog of the Zionist Union a slight lead.

Exit polls showed the two sides deadlocked but once the actual results came pouring in early today, Likud soared forward.

Even before the final results were known, Mr Netanyahu declared victory and pledged to form a new government quickly.

“Against all odds, we achieved a great victory for the Likud,” he told supporters at election night headquarters.

“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.”

Nr Netanyahu focused his campaign on security issues, while his opponents instead pledged to address the country’s high cost of living and accused the leader of being out of touch with everyday people.

His return to power for a fourth term probably spells trouble for Middle East peace efforts and could further escalate tensions with the United States.

Mr Netanyahu, who already has a testy relationship with President Barack Obama, took a sharp turn to the right in the final days of the campaign, staking out a series of hardline positions that will put him at odds with the international community.

In a dramatic policy reversal, he said he now opposes the creation of a Palestinian state - a key policy goal of the White House and the international community.

He also promised to expand construction in Jewish areas of east Jerusalem, the section of the city claimed by the Palestinians as their capital.

Mr Netanyahu infuriated the White House early this month when he delivered a speech to the US Congress criticising an emerging nuclear deal with Iran.

The speech was arranged with Republican leaders and not co-ordinated with the White House ahead of time.

In Washington, White House spokesman Josh Earnest said Mr Obama was confident strong US-Israeli ties would endure far beyond the election regardless of the victor.

Mr Netanyahu will still need the support of Moshe Kahlon, whose Kulanu party captured 10 seats and whose campaign focused almost entirely on bread-and-butter economic issues.

He is expected to become the country’s next finance minister.

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