Israeli Prime Minister Benjamin Netanyahu has claimed victory in the country’s parliamentary elections, but suffered losses to new parties on the left and right.

Mr Netanyahu told his supporters he feels a great sense of responsibility to build “the broadest possible coalition” when forming a new government.

His Likud Beitenu party won the largest number of seats in the election, meaning he can retain the position of prime minister if he can persuade enough other parties to join an alliance.

Mr Netanyahu was welcomed to a victory rally in Tel Aviv with cheers and the beating of drums by the few hundred supporters who had waited for his midnight appearance.

But the Likud Beitenu party’s popularity has been significantly eroded by the rise of new parties on both the left and the right.

As he took to the stage, Mr Netanyahu outlined his priorities for the next term as preventing Iran obtaining nuclear weapons, lowering the cost of living, bringing about equality in Israeli military service and striving for peace.

“There are many possible partners for this mission,” he said, confirming he had already begun the process of speaking to potential coalition partners.

Exit polls broadcast by several Israeli media outlets have predicted the Likud Beitenu party will win 31 seats, well below expectations.

Voter turnout was particularly high throughout the day, which is likely to have benefited the centrist and leftist parties that have performed better than expected.

The centre-left Yesh Atid party, led by former TV presenter Yair Lapid, looks to have won the second largest number of seats, with exit polls estimating a haul of 19.

On the right, the hard-line Jewish Home party, led by millionaire former commando Naftali Bennett, is also likely to pick up enough seats to push for a role in a new government.

Jewish Home look set to take 12 seats, lower than the 16 that had been predicted in some opinion polls last week, but well above the position they were in just six months ago, when most counts put them at just two seats.

The surprise success of Yesh Atid and the strong showing by Jewish Home mean horse-trading over their prospective roles in any future coalition government will be critical to Mr Netanyahu’s hopes of building an alliance of parties to give him an overall majority.

One senior Likud adviser told Reuters: “We anticipated we would lose some votes to Lapid, but not to this extent. This was a Yesh Atid sweep.”

If Mr Netanyahu fails to pull Yesh Atid into a coalition then the 17 seats expected to be won by Labour, combined with seven seats likely to go to the party of former foreign minister Tzipi Livni, could form the basis of a left-wing bloc to challenge Mr Netanyahu’s right to lead a government.

The negotiating process could continue for several days, and will ultimately be approved by Israel’s President Shimon Peres.

Turnout among the country’s 5.6 million eligible voters stood at almost 67 per cent, the highest in a decade.

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