Israeli Prime Minister Benjamin Netanyahu's ruling Likud Party has scored a surprising victory in the country's elections.
With nearly all the votes counted on March 18, right-wing Likud appeared to have won 30 out of parliament's 120 seats.
Opposition leader Isaac Herzog said he spoke to Netanyahu "and congratulated him on his achievement and wished him luck."
Exit polls had shown a tight race, but Herzog's leftist Zionist Union wound up with just 24 seats.
Preelection polls had shown Likud trailing.
Netanyahu will now have a relatively easy time putting together a coalition government with right-wing and religious allies.
If Netanyahu builds a workable coalition, it would give the 65-year-old prime minister a fourth-term in office, putting him on track to become Israel's longest-serving prime minister.
On the last day of campaigning, Netanyahu vowed not to allow a Palestinian state to be established, and commentators say the result could prove disastrous for the Middle East peace process.
"Against all odds: a great victory for Likud," Netanyahu told cheering supporters in a speech at party election headquarters in Tel Aviv after polls closed on March 17.
He said he had spoken to leaders of other right-wing parties and urged them to form a "strong and stable" government with him without delay.
Netanyahu campaigned on security issues, promising not to allow a Palestinian state if elected and warning against a deal betweeen global powers and Iran on its nuclear program.
Herzog accused Netanyahu of using scare tactics and ignoring more pressing issues, such as the high cost of living in Israel.
Netanyahu on election day accused left-wing groups of trying to remove him from power by busing Arab Israeli voters to polling stations, a statement that drew a sharp rebuke from Washington.
"We're always concerned, broadly speaking, about any statements that may be aimed at marginalising certain communities," State Department spokeswoman Jen Psaki said.
Some political rivals accused Netanyahu of racism over the remarks.
The Obama administration has been at odds with Netanyahu since he addressed the U.S. Congress two weeks ago at the invitation of Republican lawmakers, to oppose ongoing U.S. nuclear negotiations with Iran.
U.S. Secretary of State John Kerry declined to comment on the Israeli elections when asked by reporters on the sidelines of nuclear talks with Iran in Lausanne, Switzerland.
But Psaki said on March 18, "We don't think his win has impacted the Iran negotiations, or will."
Iran's Foreign Ministry was quoted as saying by the semiofficial Mehr news agency that for Tehran "there is no difference between the Zionist regime's political parties. They are all aggressors in nature."
With reporting by AP and Reuters