Israeli Prime Minister Benjamin Netanyahu and his wife Sara address supporters at the Likud party campaign headquarters in the coastal city of Tel Aviv early on March 3, 2020, after polls officially closed. (GIL COHEN-MAGEN / AFP)

JERUSALEM - Prime Minister Benjamin Netanyahu led on Tuesday in Israel's third national election in less than a year but was short of a governing majority, nearly complete results showed.

Netanyahu, head of the right-wing Likud party, claimed victory in Monday’s vote over his main challenger, former armed forces chief Benny Gantz of the centrist Blue and White

Netanyahu claimed victory in Monday’s vote over his main challenger, former armed forces chief Benny Gantz of the centrist Blue and White party, after exit polls projected the right-wing leader’s Likud party had come out on top.

“We turned lemons into lemonade,” he told a cheering crowd at Likud’s election headquarters as exit polls were released.

But Gantz stopped short of conceding defeat, saying the election could result in another deadlock and he understood and shared his supporters’ “feeling of disappointment and pain”.

With some 90 percent of the votes counted, Netanyahu, who has the pledged support of right-wing and religious parties for a coalition government, appeared to control 59 seats in parliament, two short of a ruling majority.

The gap made former defense minister Avigdor Lieberman’s far-right Yisrael Beiteinu party a potential kingmaker after remaining on the sidelines in inconclusive ballots in April and September.

A win for Netanyahu, 70, would be testament to the political durability of Israel’s longest-serving leader, who fought the latest campaign under the shadow of a looming corruption trial.

It would also pave the way for Netanyahu to make good on his pledge to annex Jewish settlements in the occupied West Bank, and the region’s Jordan Valley, under a peace plan presented by US President Donald Trump.

Palestinians have rejected the proposal, saying it would kill their dream of establishing a viable state in the West Bank and Gaza Strip, territory Israel captured in the 1967 Middle East war.

Projected seats won by the two main parties in the Israeli election based on exit polls. (GRAPHIC / AFP)

PICKING SIDES

Likud led Blue and White by 36 seats to 32, and Lieberman’s party, with seven, could tip the balance in complicated coalition building. A Likud spokesman said he expected Netanyahu to get lawmakers from the opposing camp to cross sides.

Lieberman said he would convene his party on Thursday afternoon to choose who to back.

“As we promised voters, we will do everything to prevent a fourth election and we intend to take decisive action, one way or another,” Lieberman told Israeli Channel 12 TV.

Critical of control Orthodox rabbis have over aspects of life in Israel and of military conscription exemptions granted to Jewish seminary students, he has balked at joining a Likud-led coalition with religious parties.

Israeli Prime Minister Benjamin Netanyahu smiles after first exit poll results for the Israeli elections at his party's headquarters in Tel Aviv, Israel, Feb 2, 2020. (ARIEL SCHALIT / AP)

Lieberman also has pledged not to partner with any Blue and White-led coalition dependent on the support of Arab parties.

In the previous election, in September, Blue and White edged past Likud, taking 33 seats to its rival’s 32, but Gantz, like Netanyahu, was unable to put together a ruling coalition.

ALSO READ: Israel holds election with more deadlock predicted

The mostly Arab Joint List party again emerged as the third-largest, growing to 15 seats from 13 in the last election.

ACRIMONIOUS CAMPAIGN

Israel’s economy has weathered the political stalemate, with growth strong and the labor market tight. The main issue has been no budget since the 2019 one was passed two years ago.

During an acrimonious race focused more on character than on policy, Netanyahu campaigned vigorously on his strongman “security-first” platform, familiar to voters over decades.

His loyal, blue-collar base has stood firmly behind him throughout, seemingly unfazed by his imminent trial.

READ MORE: Netanyahu corruption trial to begin March 17

During the campaign, Gantz ruled out teaming up with Likud in a “unity government” because of the criminal indictments against the prime minister, who has denied any wrongdoing.

Netanyahu has been charged with bribery, breach of trust and fraud over allegations he granted state favors worth millions of dollars to Israeli media barons in return for favorable press coverage, and that he wrongfully received gifts.

The first trial of a sitting prime minister in Israel is due to begin on March 17.