Benjamin Netanyahu is on course to lead the largest party in the next Knesset after Israeli broadcasters projected strong gains in Monday’s election.

But exit polls did not forecast a majority for his right-wing bloc of four parties, saying they will win 59 seats, two short of the minimum required.

Just five per cent of votes had been counted by the time Mr Netanyahu spoke to his supporters at 2.30am Israel time, but the Israeli prime minister nonetheless declared victory.

“We won against all odds,” he told Likud supporters in Tel Aviv.

“They eulogised us, but we prevailed. We made lemons into lemonade. We turned Israel into a superpower, we nurtured new connections with world leaders, including more leaders than you can even imagine in the Arab and Muslim world.”

It was a disappointing night for the opposition Blue & White and its leader Benny Gantz, who told supporters at a rally: “I understand the feeling of disappointment.”

He said the election campaign, the third in less than a year, had been the “nastiest” in Israel’s history, adding: “the State of Israel needs to heal, it needs unity, and reconciliation. We will continue to serve the public.”

The bloc of parties said to look favourably upon Mr Gantz’s candidacy for prime minister was projected to win between 54 and 55 seats, while Yisrael Beiteinu — the party that acted as kingmaker in the last two elections — was expected to win six seats.

The exit polls project between 14 and 15 seats for the Arab-led Joint List, which retains its position as the Knesset's third largest party, and nine for the Strictly Orthodox Shas.

An earlier version of the exit poll had projected 60 seats for the Netanyahu-led bloc, but all the broadcasters revised their figures as the night wore on.

Yisrael Beiteinu’s Avigdor Lieberman and Amir Peretz, the lead candidate of the Labour-Gesher-Meretz alliance, both said in separate press conferences earlier in the evening that they would not comment until the results became clear.

Naftali Bennett, leader of the right-wing alliance Yamina, said his movement would nominate Mr Netanyahu as prime minister and pledged to bring back his political partner Ayelet Shaked as Justice Minister, more than nine months after she was removed from the role by Mr Netanyahu.