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Voting got underway in Israel Tuesday, and as previous opinion polls suggest the election race is too close to call, CNBC tells you what you need to know.
Israel's Prime Minister Benjamin Netanyahu is the head of the major center-right Likud party. He has been in office in 2009 and is contesting his second general election.
Netanyahu's main opponent is the center-left political alliance of the Zionist Union coalition, co-headed by Isaac Herzog.
The alliance was formed in December by the Israeli Labor party (headed by Herzog) and liberal party Hatnuah, which was formed by former Justice Minister (and Likud defector) Tzipi Livni.
Polls suggest that the Zionist Union has mounted a strong campaign against the incumbent and the result could be too close to call. Voting began on Tuesday at 7 a.m. local time (1 a.m. ET) and will close at 10 p.m. local time.
It is expected that whatever the outcome, both parties would have to conduct negotiations to form a coalition big enough to govern in the Israeli parliament, the Knesset.
The Knesset has 120 seats. Once a party or coalition of parties controls 61 seats or more, it becomes the government.
Final opinion polls published on Friday by private television channels, Channel 10 and Channel 2, predicted that the Zionist Union would take between 24 and 26 seats, compared to 20-22 for Likud.
With such a result, both parties would have to co-opt other smaller political groups among the 34 parties running in the election, in order to form a government.
Israel is no stranger to coalition governments as no single party has ever one an outright election, according to Professor Reuven Hazan, chair of the Political Science Department at the Hebrew University of Jerusalem.
Security issues continue to be a priority for the majority of voters but the economy and high cost of living have increasingly become a bone of contention for political parties too.
The cost of living, for one, is a hot topic for voters. House prices have risen by 55 percent from 2008 to 2014, according to a report by Israel's state auditor published in February -- dates covering the years that Netanyahu has been in power.
While parties on the left, like the Zionist Union, have tried to make the most of the country's economic problems, the right tends to have more traction with voters on security issues.
The outcome of Israel's elections could have knock-on effects on the future of the failed peace process in the region, with political pundits seeing Herzog as a possible politician to get the derailed peace process back on track. That's not to write-off Netanyahu's chances though.
At a time of increased tensions and violence in the Middle East, security concerns are high on the priority list for Israelis.
Prime Minister Netanyahu has been very vocal in his opposition to international talks over Iran's nuclear program and the ongoing Israeli-Palestinian conflict. Netanyahu stressed in a campaign statement earlier this month that, should he win re-election, there would be "no retreat" and "no withdrawals [from the Occupied Palestinian Territory]."
He reiterated that message at a rally this Sunday, saying: "We are keeping Jerusalem, all parts of Jerusalem, under Israeli sovereignty. "We do not retreat, and we do not fold and I say this under the greatest pressures as well," he told a rally of between 15,000 and 30,000 supporters in Tel Aviv on Sunday, Reuters said.
With the polls in mind, however, Netanyahu knows that his days in office could be numbered.
Speaking at the rally in Tel Aviv Sunday, Netanyahu said: ""Our rivals are investing a huge effort to harm me and the Likud, to open a gap between my party, the Likud, and (our rivals), and if we don't close this gap, there is a real danger that a left-wing government will rise to power," Netanyahu said, according to Reuters.
The lack of progress in peace talks between Israel and the Palestine Authority have become a source of frustration for the U.S. administration and Europe after the latest round of negotiations broke down last year.
Many feel that Netanyahu has moved away from his earlier support of a two-state solution with Palestine, although he has denied this.
Herzog, meanwhile, appears to be an advocate for a two-state solution but has said that Israel's borders would include disputed "settlement blocs."
- By CNBC's Holly Ellyatt, follow her on Twitter . Follow us on Twitter: @CNBCWorld