Netanyahu's future hangs in the balance as exit polls show Gantz's White and Blue making gains on higher turnout.
Polls have closed in Israel and ballots are being counted after millions took part in an election widely seen as a referendum on the fate of incumbent Prime Minister Benjamin Netanyahu.
Netanyahu, who became Israel's longest-serving prime minister in July, is seeking a record fifth term in office. He is competing against his toughest challenger in years, former army chief Benny Gantz, leader of the centrist Blue and White party.
According to the first round of exit polls, Netanyahu and his right-wing coalition bloc have failed to secure the 61 seat majority they needed.