After more than 87.5% of the vote has been tallied, the right-wing bloc headed by Prime Minister Benjamin Netanyahu's Likud, appears to be on 59 Knesset seats, even with the support of Naftali Bennett's Yamina.
Early exit polls following Tuesday's election indicated a virtual deadlock for a fourth time in the past two years, leaving the country facing the prospect of continued political gridlock and unprecedented fifth consecutive election in just two years.
The latest tally does not include the double envelopes, which include the votes of coronavirus patients, soldiers and Israelis abroad.
According to the latest results, Likud has 30 seats, Yesh Atid 17, Shas 9, Blue & White 8, United Torah Judaism 7, Labor 7, Yamina 7, Yisrael Beiteinu 7, Religious Zionism 6, The Joint List 6, New Hope 6, Meretz 6 and Ra'am with 5.
The small Islamist party, which surprisingly developed ties with Netanyahu and has not ruled out joining his right-wing government, for the longest time appeared as though it did not pass the electoral threshold, only for that to change as the vote count progressed.
Ra'am leader Mansour Abbas, however, insisted the party will be in the Knesset from the start. "I hope we will even win five seats, but we will have at least four. We started with exit polls that did not really flatter us. We knew from the beginning that the end result would be different."
According to the surplus agreements among the parties, if Ra'am passes the threashold, Likud, Yesh Atid, Shas and United Torah Judaism will each lose one Knesset seat.
Based on the data showing the distribution of votes around the country, Yair Lapid's Yesh Atid appears to be leading in municipalities in the center of the country, while Likud is ahead in the south and the north, with the exception of Haifa where the vote looks to be evenly split.
In Jerusalem, United Torah Judaism appears to be the leading party with the majority of the vote, followed closely by Likud.
In the meantime, in a speech to his supporters, Bennett declined to take sides. He vowed to promote right-wing values but also took several veiled swipes at the prime minister's leadership style.
"Now is the time for healing," he said. "The norms of the past will no longer be acceptable." He said he would move the country "from leadership that is interested in itself to a professional leadership that cares."
Bennett has indicated he will drive a hard bargain with Netanyahu, demanding senior cabinet ministries and perhaps even a power-sharing arrangement that includes a stint as prime minister - similar to the one Netanyahu had with Benny Gantz.
Associated Press contributed to this report