Blue and White leader rejects offer to serve under Likud after close-run Israeli election

Benjamin Netanyahu is furiously manoeuvring to cling to office after his rival Benny Gantz refused to serve under him in a government of national unity following an inconclusive election.

Gantz’s Blue and White alliance is two seats ahead of the Israeli prime minister’s Likud party, according to results published by Israeli media with 97% of the vote counted.

Prime minister cancels trip to UN general assembly to deal with political crisis

Benjamin Netanyahu and the opposition leader, Benny Gantz, have begun what could be a prolonged period of high-stakes political bartering after an inconclusive election in Israel showed neither had a clear path to form a coalition.

Many Israelis hoped the poll, the second in five months, would provide clarity and pull the nation out of a political crisis. But the muddy results that trickled in on Wednesday appeared to deadlock the country instead.

Five possible scenarios for rivals Benny Gantz and Benjamin Netanyahu

Israelis have voted in a second election that has left the country in a political stalemate.

In the coming days, the president will consult party leaders before choosing the person he believes has the best chance of putting together a coalition.

Benjamin Netanyahu’s warnings that Arab parties would topple him may have backfired

It’s become a tired trope of Benjamin Netanyahu’s election campaigns: as the country draws closer to election day the leader ramps up his racist scaremongering suggesting Israel’s Arab minority are preparing to vote en masse.

Infamously in 2015 he said Arabs were “voting in droves”. This year the prime minister almost lost his voice on Tuesday as he shouted through a megaphone to his base. His political rivals in the Arab parties, he screamed, would gather enough parliamentary seats to topple him. “So go and vote!”

• Vote is country’s second in a year
• Both PM Netanyahu and challenger Gantz back annexing Palestinian land
• Exit poll at 10pm (8pm BST, 3pm ET)

10.26pm BST

Election day is always a national holiday in Israel and today it bright and sunny. Lots of people out on the beach in Tel Aviv and the streets were packed.

Just after midnight here and Blue and White are holding their election party in large hanger on the waterfront that appears to be a music venue. They are even playing trance music. But still pretty empty here, and reports suggest it’s the same at Likud. The exit polls have clearly concerned both parties.

10.10pm BST

Here’s a little more detail on the comments from the Israeli president, who has indicated a willingness to press party leaders to quickly form a new government.

Rivlin’s office said his nomination of a candidate would be guided in part by the need to avoid a third election after two votes in five months. It said he would meet with party leaders “after he receives a clear picture of the results, and as soon as possible”.