Since none of the candidates won 61 or more votes, both Tzipi Livni and Benjamin Netanyahu claimed victory at rallies. Now they have to form coalitions to get the winning votes.
BBC: Leaders of the two main Israeli parties are seeking coalition partners to form a government after neither emerged the clear winner in early elections.
The governing centrist Kadima (Tzipi Livni)won 28 seats and the right-wing Likud (Benjamin Netanyahu) opposition won 27 - both well short of the 61 needed to form a government.
The ultra-nationalist Yisrael Beiteinu came third with 15 seats.
Israel's president is expected to begin consultations next week about which party to ask to form a government.
The election results - if confirmed - push the Labour party led by Defence Minister Ehud Barak into an unprecedented fourth place.
Analysts say that gains by right-wing parties could give Mr Netanyahu a better chance of forming a coalition.
On the basis of the exit polls, Likud and various nationalist parties control 65 of 120 seats in the Knesset.
Yisrael Beitenu leader Avigdor Lieberman said his party wanted a right-wing government, but added "we do not rule out anyone".
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