TEL AVIV—Neither Prime Minister Benjamin Netanyahu nor his main rival commanded a majority after Israelis voted Tuesday, exit polls suggested, possibly opening a period of uncertainty over Israel’s next government as conflict flares between Iran and U.S. Mideast allies.

The deadlock raised the prospect of Israel’s two largest political parties forming a unity government, a task that could take weeks to negotiate. No party declared victory, in a stunning setback for Israel’s longest-serving leader. By early Wednesday morning here, Israel’s three major television networks all projected that Mr. Gantz’s bloc of center, left and Arab parties had a slight edge over Mr. Netanyahu’s right-wing and religious bloc. A surge in Arab voter turnout appeared to have boosted Mr. Gantz’s fortunes.

Israeli Prime Minister Benjamin Netanyahu and his wife, Sara Netanyahu, casting their votes at a voting station in Jerusalem on Tuesday.

Photo:

Heidi Levine/press pool

A buoyant Mr. Gantz told cheering supporters Wednesday morning that he had already begun coalition negotiations and would speak with every party to try to form a broad government. “The journey begins for healing Israeli society,” he said. Mr. Netanyahu, who appeared late before a small, subdued crowd chanting against a unity government, didn’t rule one out but vowed to block the participation of Arab parties. “In the days ahead, we will enter negotiations to establish a strong Zionist government and not a dangerous, anti-Zionist government,” he said. A prolonged period of government talks could leave Israel without a clear leader during a turbulent time. Mr. Netanyahu also faces a hearing on possible bribery and fraud charges in two weeks, allegations that he denies. The results remained fluid. Israel’s television projections have been wrong in the past, and actual vote counting appeared to be slow going, with 5% of the vote counted as of 2:15 a.m. It could fall to former Defense Minister Avigdor Lieberman to determine the next prime minister. He broke from Mr. Netanyahu’s coalition this year and has called on Mr. Gantz’s Blue and White party and Mr. Netanyahu’s Likud to quickly form a unity government. He was projected to win enough parliament seats to potentially block either large party from governing without him.

Benny Gantz, leader of the Blue and White party, in Rosh Haayin, Israel, on Tuesday.

Photo:

Kobi Wolf/Bloomberg News

“We have but one option, a wide, liberal national-unity government,” Mr. Lieberman said in a speech after polls closed. He called on Israel’s President, Reuven Rivlin, to invite Messrs. Gantz and Netanyahu to an informal talk Friday. The election posed a tough challenge to Mr. Netanyahu after more than a decade in power, as he faced an increasingly deep divide between Israel’s religious groups and its secular society. Those differences sometimes overshadowed the prime minister’s efforts to stress his perceived advantage on security.

Mr. Netanyahu, already Israel’s longest-serving prime minister, campaigned as Israel’s indispensable master of foreign relations and touted the military operations his government has carried out in Lebanon, Iraq and Syria. He spent the last two days of the campaign recording messages saying high Arab turnout would be dangerous for the country, in a bid to drive supporters to the polls. Meanwhile, Mr. Gantz, a centrist, tried to rally voters who are tired of the prime minister’s long reign. A popular military chief under Mr. Netanyahu from 2011 to 2015, Mr. Gantz promised a tough security policy, saying he would deter Hamas from rocket attacks in the Gaza Strip. The election comes at an especially fraught moment in the Middle East. President Trump counts on Mr. Netanyahu as a close ally in Washington’s confrontational stance against Iran. The tension surrounding Iran has heightened since the weekend, with the U.S. weighing a military response after accusing Tehran of an attack on Saudi oil facilities. Though Mr. Netanyahu and President Trump have forged a close bond, Mr. Trump declined to back either candidate when asked this week and said the race looked close.

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The vote’s outcome will almost certainly have a bearing on the Israeli-Palestinian conflict. Mr. Netanyahu has promised to annex swaths of the West Bank if re-elected, and Mr. Trump says he plans to release a long-awaited peace proposal for the conflict after the elections. The election is the second this year, after a vote in April left Mr. Netanyahu and his allies unable to form a majority government in the Knesset. The prime minister failed because he was unable to bring together the secular and religious parties he had been counting on to form a coalition, including Mr. Lieberman’s party. For many Israelis, Tuesday’s repeat election has crystallized into a referendum on how much influence religion should have in their daily lives. Messrs. Lieberman and Gantz had promised to form a secular government and wooed voters who object to the powerful role Israel’s religious parties have in the current one. Mr. Netanyahu has relied on smaller religious parties to form governments in the past, allowing them to maintain control over marriage, divorce and Sabbath observance by closing businesses and stopping public transport on Fridays and Saturdays. The leadership contest could come down to a decision by Mr. Rivlin, the largely ceremonial head of state whose most significant constitutional task is determining who has the strongest mandate to form a government.

The first bite is usually given to the leader who receives the most support from across the different parties. With exit polls showing Mr. Lieberman with eight to 10 seats, he could be in a position to put either Mr. Netanyahu or Mr. Gantz over the threshold. Mr. Rivlin’s office said Tuesday he would begin consultations as soon as possible in a bid to swiftly form a new government and avoid a third election this year. The exit polls set off a storm of speculation about how Mr. Netanyahu would maneuver to stay in power and whether Mr. Gantz could actually cobble together a majority to form a government. Senior members of Likud said their party wouldn’t depose Mr. Netanyahu as leader but were willing to enter a unity government with the Blue and White party. “There will not be any deposing of Netanyahu. We are all standing behind him,” said Miri Regev, a senior Likud minister, in an interview on Channel 12. Hurdles remain high to such an agreement, with Blue and White’s lawmakers maintaining their pledge not to let Mr. Netanyahu lead the government. “We will not sit in any unity government in which Netanyahu is the head of it,” Blue and White lawmaker Avi Nissenkorn said on Israel’s Channel 11. The Joint List, an alliance of parties that represent most of Israel’s Arab citizens, looked on track to increase its presence to be the third-largest party in the Knesset. An Arab party has never sat in Israel’s government, intent on avoiding being connected with Israel’s military campaigns against the Palestinians. If Likud and Blue and White form a government together, Ayman Odeh, head of the Joint List, would become the first Arab citizen of Israel to be the leader of the opposition. That position traditionally brings regular meetings with the prime minister and classified security briefings. “Perhaps for the first time, we’ll lead the opposition, a respected position. I believe this is an important opportunity,” Mr. Odeh said. “Netanyahu will cease to be the prime minister thanks to the population that he incited against,” he added. Some voters said replacing Mr. Netanyahu was their prime motivation for voting. David Cohen, 69 years old, from the Israeli settlement of Ma’ale Adumim, said he used to be the head of its Likud party branch but has soured on Mr. Netanyahu in recent years. He said he voted for Mr. Lieberman. “I am afraid what the Haredi are going to do to this country and what Bibi has given them,” he said, referring to Israel’s ultra-Orthodox population and using a nickname for Mr. Netanyahu. Corrections & Amplifications The first name of Benjamin Netanyahu’s wife, Sara Netanyahu, was incorrectly spelled as Sarah in an earlier version of this article. Write to Felicia Schwartz at Felicia.Schwartz@wsj.com

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