Many opponents yielded the security issue to Netanyahu and instead campaigned on economic concerns, such as the high cost of living and the government's much-maligned practice of giving generous handouts and draft exemptions to the ultra-Orthodox Jews.
While Israel's economy has remained on solid footing, Netanyahu's government has run up a huge deficit that could force steep budget cuts in coming months.
Only one major contender, former Foreign Minister Tzipi Livni, campaigned on a platform centered on the need for peace with Palestinians.
Livni implored voters to think about the "big decisions" at hand.
"The vote I have cast includes the hopes of all the people who don't want four more years of Netanyahu and this government," she said.
In the run-up to the election, opinion polls universally forecast Netanyahu's Likud-Yisrael Beitenu alliance emerging as the largest single bloc, controlling roughly one-quarter of parliament's 120 seats and in a strong position to form a majority coalition.
Should the right-wing and religious parties somehow fail to muster a majority, there will be a mad scramble on the center-left to try to form a coalition on their own.
Under that scenario, Labor Party leader Shelly Yachimovich could end up as prime minister. The former radio journalist who once backed Israel's Communist party campaigned on a promise to narrow the gap between rich and poor and has said she will not join a Netanyahu government.
In all, 32 parties were running. Israel has historically had multiparty governments because no party has ever won an outright majority in the country's 64-year history. Polls close at 10 p.m. local time (3 p.m. ET, 2000 GMT), with preliminary results to be released shortly after that.
In a sign of the times, many Israelis advertised their voting choice by photographing their ballot slips and uploading them to Facebook.
Netanyahu has won praise at home for drawing the world's attention to Iran's suspect nuclear program and for keeping the economy on solid ground at a time of global turmoil.
But internationally, he has repeatedly clashed with allies over his handling of the peace process. Peace talks with the Palestinians have remained deadlocked throughout his term, in large part because of his continued construction of Jewish settlements in the West Bank and east Jerusalem.
A shift by Netanyahu away from his tough line toward the Palestinians appears unlikely. Netanyahu himself has only grudgingly voiced conditional support for a Palestinian state, and his own party is now dominated by hard-liners who oppose even this.
Likud primaries robbed the party of its most moderate figures, and up to one-sixth of the incoming legislature is expected to be settlers who advocate holding on to captured land the Palestinians want for a future state. That could translate into a more hawkish government.
A likely coalition partner, Naftali Bennett of the surging Jewish Home Party, has even called for annexing large parts of the West Bank, the core of any future Palestinian state.
Motti Saban, a 25-year-old student in Jerusalem, said he would vote for Jewish Home.
"We are right-wing and we want to see a parliament that is more right-wing than now," Saban said. "Social issues affect us all, but I won't give up Jerusalem. That's more important," Saban said.
Associated Press writers Amy Teibel and Diaa Hadid in Jerusalem and Cassandra Vinograd in London contributed to this report.
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