Israeli Prime Minister Benjamin Netanyahu and his main challenger Benny Gantz were deadlocked with nearly all votes from the country's general election counted, Israeli media reported.

Various Israeli media reported that Mr Netanyahu's right-wing Likud and Mr Gantz's Blue and White had 32 seats each of parliament's 120 with more than 90% of the vote counted.

The reports were citing sources with the elections committee, as that level of results had not been officially posted yet.

If the results hold, it will be a major setback for Mr Netanyahu, who hoped to form a right-wing coalition similar to his current one as he faces the possibility of corruption charges in the weeks ahead.

With a hoarse voice and appearing haggard after days of intense campaigning, Mr Netanyahu spoke before supporters in the early hours of this morning and said he was prepared for negotiations to form a "strong Zionist government."

He seemed to hint at openness to forming a national unity government, but did not specifically say so.

In his speech to supporters in Tel Aviv, Mr Gantz called for a "broad unity government" but cautioned that he was waiting for final results.

"We will act to form a broad unity government that will express the will of the people," the former armed forces chief said.

"We will begin negotiations and I will speak with everyone."

When journalists approached him as he was on his way for a run today, Mr Gantz said "we'll wait for the final results ... and wish Israel a good unity government."

Mr Netanyahu had not spoken in public since his early morning speech.

Ex-defence minister Avigdor Lieberman could prove to be kingmaker, with the reported results showing his nationalist Yisrael Beitenu with nine seats.

The mainly Arab Joint List alliance was set to become the third-largest bloc in parliament with 12 seats, the reports said.

That could put the Arab parties in a position to block Mr Netanyahu from continuing as prime minister if they decide to break with precedent and endorse Mr Gantz for the job.

Israel's Arab parties have traditionally not endorsed anyone for prime minister.

"The main difference in this vote is the turnout among Arab citizens," Joint List leader Ayman Odeh told journalists outside his home in the northern city of Haifa.

"There's no doubt that this is what made the difference. Without that, Netanyahu would already be prime minister."

After exit polls were released last night, Mr Lieberman called for a unity government with his party, Likud and Blue and White, saying the country was facing an "emergency."

The election was the second in five months for Israel, and President Reuven Rivlin, who must choose someone to form the next government, said there was a "need to avoid a third".

Mr Netanyahu, Israel's longest-serving prime minister, suffered one of the biggest defeats of his political career after the previous elections in April.

His Likud along with its right-wing and religious allies won a majority, but he failed to form a coalition and opted for a second election rather than risk having Mr Rivlin choose someone else to try.

The stakes could not be much higher for Mr Netanyahu, who many believe will seek immunity from prosecution in parliament should be survive as prime minister.