Weakened Israeli prime minister Benjamin Netanyahu is fighting to keep his job after a parliamentary election that produced a stunning deadlock.
He is hoping for support from a new centrist party that advocates a more earnest push on peacemaking with the Palestinians.
The result defied forecasts that Israel's next government would veer sharply to the right as the country faces mounting international isolation, growing economic problems and regional turbulence.
While that opens the door to unexpected movement on peace efforts, a coalition joining parties with dramatically divergent views on peacemaking, the economy and the military draft could just as easily be headed for gridlock - and perhaps a short life.
Israeli media said that with nearly all votes counted, each bloc had 60 of parliament's 120 seats. Commentators said Mr Netanyahu, who called early elections three months ago expecting easy victory, would be tapped to form the next government because the rival camp drew 12 of its 60 seats from Arab parties that traditionally are excluded from coalition building.
A surprising strong showing by a political newcomer, the centrist Yesh Atid, or There is a Future, party, turned pre-election forecasts on their heads and dealt a setback to Netanyahu. Yesh Atid's leader, Yair Lapid, has said he would only join a government committed to sweeping economic changes and a serious push to resume peace talks with the Palestinians, which have languished throughout Mr Netanyahu's four-year tenure.
The results were not official, and the final bloc breakdowns could shift before the central elections committee finishes its tally early on Thursday. With the blocs so evenly divided, there remains a remote possibility that Mr Netanyahu would not form the next government, even though both he and Mr Lapid have called for the creation of a broad coalition.
Under Israel's parliamentary system, voters cast ballots for parties, not individual candidates. Because no party throughout Israel's 64-year history has ever won an outright majority of parliamentary seats, the country has always been governed by coalitions.
Mr Netanyahu's Likud-Yisrael Beitenu alliance polled strongest winning 31 parliamentary seats. But that is still 11 fewer than the 42 it held in the outgoing parliament and below the forecasts of 32 to 37 in recent polls. Yesh Atid had been projected to capture about a dozen seats but won 19, making it the second-largest in the legislature.
Addressing his supporters earlier, when an initial vote count gave him a shaky, one-seat parliamentary margin, Mr Netanyahu vowed to form as broad a coalition as possible. He said the next government would be built on principles that include reforming the contentious system of granting draft exemptions to ultra-Orthodox Jewish men and the "responsible" pursuit of a "genuine peace" with the Palestinians. He did not elaborate, but the message seemed aimed at Mr Lapid. Mr Netanyahu later called Mr Lapid and offered to work together. "We have the opportunity to do great things together," he said.