Results published by both Channel 2 and Channel 10 television gave the Joint List 13 seats.
Closely following was the centrist Yesh Atid, which took 12 seats in the first poll and 11 in the second, in figures published within minutes of the close of polling stations.
20.21 BBC's Kevin Connolly says there are celebrations at Likud but notes: "People are relieved that it is much, much better than, at one point, it looked as though it was going to be."
20.18 Exit polls in full:
20.15 Haaretz report that President Reuven Rivlin will work towards a national unity government.
"I am convinced that only a unity government can prevent the rapid disintegration of Israel's democracy and new elections in the near future," Mr Rivlin said.
20.08 More details from Reuters: Exit polls by Israel's leading television channels showed that Prime Minister Benjamin Netanyahu's Likud party drew even with Isaac Herzog's Zionist Union in the election on Tuesday, making the formation of the next government a serious challenge for both candidates.
Channel 10 and Channel 1 said Likud and the Zionist Union had secured 27 seats each in the 120-member Knesset, while Channel 2 said that Mr Netanyahu had eked out a narrow victory, winning 28 seats to 27 for Mr Herzog.
Final results are not expected until early on Wednesday morning.
20.03 Some of the possible numbers coming out
20.00 AND THE POLLS HAVE CLOSED. Voting has officially come to an end in Israel.
Meanwhile, Mr Netanyahu's comments drew a rebuke from Washington, where the Obama administration is already angry with Netanyahu for delivering a speech to Congress opposing its nuclear talks with Iran.
"We're always concerned, broadly speaking, about any statements that may be aimed at marginalising certain communities," Jen Psaki, State Department spokesman, said.
19.56 AFP reports that Israel's electoral authorities blocked the broadcast of a press conference by Prime Minister Benjamin Netanyahu as voters went to the polls, saying that "propaganda" was banned on election day.
In response to an appeal by Mr Netanyahu's rivals, Central Elections Committee chairman Salim Jubran said that electoral law forbids the airing of "propaganda on TV and radio channels".
He quoted a decision from the previous election in 2013, which decreed that everything voiced by politicians on an election day is "blatant propaganda".
Mr Netanyahu responded furiously in a video posted on Facebook.
"All the politicians are speaking to the press today ... and it was blatant election propaganda," he said.
"The only one they decided to ban from speaking to the press was me!" he spluttered.
"But nobody will shut our mouths. In a democracy, a Likud prime minister also has the right to say his piece," he said.
19.54 In the latest in a series of inflammatory Facebook messages, Benjamin Netanyahu has posted that the Arab Joint List has reached an agreement with Isaac Herzog that he should be sent to prison in the event of the Zionist Union leader forming a new government, Israel's Channel Two television station reported.
19.44 Sheera Frankel , BuzzFeed's Middle East Correspondent, reports on rumours that Mr Netanyahu and Mr Herzog are neck and neck.
She is Likud Party headquarters and reports that there are "hundreds of journalists and not a politician in site. Lots of the media interviewing the media".
19.36 We're in the final stretch. Less than half an hour until the polls close and soon after at 8pm GMT, 10pm local time, we will get the exit polls.
19.03 Sarah Silverman has shared a letter her niece has written to Mr Netanyahu.
In the letter addressed to President Barack Obama, Hallel Silverman criticises the current Israeli prime minister and thanked Mr Obama for his support. She stressed the importance of good US-Israeli relations and urged Mr Obama to think about the other Israeli citizens when he meets Mr Netanyahu.
Here's an excerpt:
We’re not going to enact a real long term solution for the Middle East without the partnership and support of The United States of America — and, specifically, leaders like you who knows that diplomacy and strategy are the first, best options whenever possible.
You can read the full letter here on the Jerusalem Post .
18.55 Yair Rosenberg says that at 8pm, election turnout hit 65.7 per cent - highest since 1999.
He notes the UK saw a turnout of 65.1 per cent in 2010 (will the UK see a higher turnout this year?)
At this point, I would like to invite readers to get in touch. What do you think of the elections? Are you a Bibi fan?
My email is raziye.akkoc@telegraph.co.uk and you can also get in touch via Twitter, @razakkoc .
18.29 The likely kingmaker who could hold the balance of power in the 120-seat Knesset is a former telecommunications minister called Moshe Kahlon, writes Robert Tait and David Blair.
Mr Kahlon, a former member of Likud, could then be able to decide whether Mr Netanyahu or Mr Herzog becomes prime minister.
"I voted for Kahlon because he is campaigning on a more social level," said Ofra Cohen, 45, as she voted in Jerusalem. "I have always voted for Bibi before and this is my first time not voting L kud. In the last years, Bibi has really disappointed. He has been looking after the rich people and forgotten about the middle-class.”
18.13 More from the Telegraph's reporters in Israel.
"The right-wing government is in danger,” said the prime minister. “Arab voters are coming out in droves to the polls. Left-wing organisations are bussing them out. Get out to vote, bring your friends and family, vote Likud in order to close the gap between us and Labour.”
Mr Herzog, a former minister for social welfare, acidly replied that anyone voting for Mr Netanyahu would be "following his path of despair and disappointment".
But the prime minister’s allies are the ones who feel aggrieved. Earlier this year, Mr Netanyahu was damaged by a series of revelations about his extravagant use of public funds on personal and official residences. A grass-roots organisation called “Victory 15” has emerged with the sole purpose of campaigning against him.
18.00 As we enter the final two hours of the election, David Blair in Jerusalem shares this translation of a text sent to Likud supporters.
Here's a translation of an SMS sent to Likud supporters across Israel today: "The percentage of Arab voters has tripled. The fear is being realised. Abu Mazen's call and American money are bringing the Arabs to the ballot box. Go out and vote!"
During David Blair's time in the city, he also shared this image of the nerve centre of Likud headquarters.
Mr Netanyahu, the longest-serving Israeli leader since David Ben Gurion, is fighting for his political life. Recent polls have shown his right-wing Likud party trailing three or four seats behind Zionist Union, a left-wing alliance led by Isaac Herzog of the Labour party.
After a bitterly acrimonious campaign, Mr Netanyahu cast his own vote in Jerusalem and then issued a statement claiming that Zionist Union had allied with Israel’s Arab minority to drive him from power.
”The right-wing government is in danger,” said the prime minister. “Arab voters are coming out in droves to the polls. Left-wing organisations are bussing them out. Get out to vote, bring your friends and family, vote Likud in order to close the gap between us and Labour.”
16.35 Sam Dodge created this graphic to show the projected outcome of today's election, according to the last polls on Friday.
16.29 Who will become the next Israeli prime minister?
Will it be Bougie or Bibi? In a country where every front-rank politician seems to have a nickname, the two contenders for Israel’s premiership in Monday's election are universally known by their short and similar sobriquets.
“Bibi” is Benjamin Netanyahu, the longest-serving prime minister since David Ben-Gurion; “Bougie” is Isaac Herzog, the leader of the Labour party and a man seen by almost no one as a possible national leader until a few months ago.
Mr Herzog, the Labour leader joined forces with Tzipi Livni, a former foreign minister, to create a Left-wing alliance called Zionist Union, with the sole aim of driving Mr Netanyahu from office - something which could happen.
And this makes it all the more exciting: when an outcome cannot be easily guessed at, the joy of voting, live coverage and results is so much higher.
15.38 Ahead of today's election, Mr Netanyahu courted controversy and caused some damage to his relations with President Barack Obama. The reason for the intense focus within Israel and outside of the country as it could mark the end of the line for Bibi, writes David Blair.
This election is being closely watched because it could marks the end of the line for the man who has become Israel's longest-serving prime minister since David Ben Gurion.
While nothing is certain, every recent opinion poll has shown Mr Netanyahu trailing behind Isaac Herzog's Zionist Union by three or four seats. If he becomes prime minister, Mr Herzog has said that his first priorities would be to sort out Israel's affordable housing crisis - the number one domestic issue - while rebuilding relations with the United States and "reigniting" the peace process with the Palestinians.
They will not say so, but that sort of approach would delight just about every Western government. They will be waiting to see if Herzog does indeed win enough seats today to be in pole position to lead the next coalition.
15.21 David Blair, The Telegraph's Chief Foreign Correspondent, is out in Jerusalem as the voting continues and spoke to one party's adviser who advises caution when hearing Mr Netanyahu speak.
Benjamin Netanyahu’s declaration on Monday that he opposes a Palestinian state should be seen in this light.
The prime minister, behind in the polls, is doing everything he can to shore up Right wing support. Saying that he's against Palestinian statehood is an easy way to win back voters who have drifted to other Right wing parties, particularly Jewish Home led by Naftali Bennett.
Will this provide any guide to how Netanyahu might behave if he clings on as prime minister? "He'll call President Obama and say 'I'm still committed'," said the adviser.
14.35 Hello and welcome to the Telegraph's live coverage of the Israeli elections.
The election has been a tight race between Labour leader Isaac Herzog and the Zionist Union; and Benjamin Netanyahu's Likud party.
Mr Netanyahu, the current prime minister, called for the snap election in December after his coalition split over the 2015 budget among other issues.
Bibi, as he is affectionately referred to by some, appeared to be on course to become Israel's prime minister again but a series of decisions and growing concerns over the economy and cost of living have threatened his strong position.
The last 12 months have been turbulent for Israel and Mr Netanyahu following the kidnap and murder of three Israeli teenagers in the summer which led to the Gaza conflict and Hamas rockets against Israel.
But for many, this election - despite his speech to Congress about Iran - is about the economy and the cost of living.
Throughout the day, we will be bringing updates from the election, more information about who the parties and leaders are and what the impact will be on Israel and its citizens.
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