Key questions following Israel's parliamentary election:
Exit polls indicate that Prime Minister Benjamin Netanyahu is likely to retain his job, but he emerged politically weakened. His hard-line Likud-Yisrael Beitenu electoral bloc dropped from 42 to 31 seats, but remains the largest faction in the 120-member parliament. Together with other hard-line parties, he appears to command a slight majority.
The balance between the two political camps — religious-hawkish and center-left — could change as actual votes are counted.
The biggest surprise was the strong showing of "Yesh Atid," or "There is a future," a new centrist party that exit polls suggest won 19 seats. The party, led by former TV anchor Yair Lapid, demands an end to blanket military draft exemptions and government stipends for ultra-Orthodox Jews.
The centrist Labor, which focused on domestic issues, won 15 seats. The pro-settler Jewish Home, a small fringe party in the outgoing parliament, jumped to 11 seats, according to exit polls.
—HOW WILL THIS AFFECT PEACE EFFORTS WITH THE PALESTINIANS?
In trying to piece together a majority coalition government, a weakened Netanyahu might be forced to offer concessions to the Palestinians to restart peace negotiations, namely, a freeze in settlement construction in the West Bank and east Jerusalem.
—WHAT HAPPENS NEXT?
Traditionally, the leader of the largest party gets the first shot at trying to form a coalition government, but party leaders could also ask Israel's president to assign the job to another candidate they agree on. The politician given the task would have six weeks to form a coalition.
—WHAT KIND OF GOVERNMENT WILL BE FORMED?
Netanyahu says he wants to form a broad-based government, but Lapid will have considerable say over the make-up of the new coalition. It's not clear whether Lapid would lobby for a more centrist government or accept rightist partners, such as the Jewish Home. In any scenario, ideological disagreements between potential coalition partners will make it difficult to form a stable government.
—HOW WILL THIS AFFECT ISRAEL'S RELATIONS WITH THE U.S.?
Netanyahu will likely come under growing U.S. and European pressure in his next term to resume meaningful negotiations with the Palestinians and halt settlement expansion.
Talks have been frozen for the past four years, in part because Netanyahu's outgoing right-wing government rejected a Palestinian demand for a construction freeze.
President Barack Obama has signaled growing displeasure with Netanyahu's policies toward the Palestinians, including the continued settlement building. A possible change in those policies depends on the type of coalition Netanyahu puts together.