Exit polls project interim Prime Minister Ehud Olmert's Kadima party will win the most parliamentary seats in Israel's election.
The surveys, issued after voting ended, gave centrist Kadima 29-32 seats in the 120-member legislature, putting it in a good position to form a coalition government, with 20-22 seats going to centre-left Labour and 12 to the right-wing Likud.
Olmert aims in the absence of progress towards peace to impose a border on the Palestinians by dismantling isolated Jewish settlements in the West Bank by 2010 and expanding bigger blocs in the territory.
Palestinians say such go-it-alone moves, sweeping measures that would uproot tens of thousands of settlers while tracing a frontier along a fortified barrier Israel is building inside the West Bank, would deny them a viable state.
Exit polls broadcast by Israeli media after voting ended gave Kadima 29-32 seats in the 120-member parliament, putting it in a good position to form a governing coalition.
The polls forecast centre-left Labour would receive 20-22 seats, the far-right Yisrael Beitenu party 13-14 and, in a sharp setback for former Prime Minister Benjamin Netanyahu, his right-wing Likud was projected to get only about 12 seats.
Unilateralism appeals to many Israelis worn down by a five-year-old Palestinian uprising and concerned by the rise to power of Hamas in the West Bank and the Gaza Strip after the Islamist militant group won elections in January.
"I hope we can reach a peace deal with the Palestinians, at the very least separate ourselves from them. We have no other choice," said Hanan Yoran, 43, after voting in Tel Aviv.
Near-final results should be available later today.
Israelis voted on the same day the Palestinian parliament approved a Hamas government. The group, formally sworn to Israel's destruction, called for a "just peace" on Monday but has shown no sign of softening its stance on the Jewish state.
"While the election is being held in the Israeli entity, the flags of the Hamas government are being raised," Palestinian Prime Minister-designate Ismail HaniyehIn of Hamas told a rally in Gaza.
Some 20,000 Israeli police and volunteers were on patrol to guard against possible Palestinian bombings on election day.
For Olmert, victory would mean approval of "consolidation", his term for the unilateral steps he plans should Hamas refuse to recognise Israel, disarm and accept interim peace accords.
"We will confront whatever is the result of the election by uniting against the occupier and against the Israeli aggression ... by all possible means," Hamas lawmaker Mushir al-Masri said.
The World Court has ruled that all of the 145 settlements Israel has built on occupied territory are illegal. Israel disputes this.
The trauma for settlers of any withdrawal from land they see as a biblical birthright could dwarf that of last year's Gaza pullout, which then-Prime Minister Ariel Sharon championed in a reversal of policy.
Sharon founded Kadima last November after bolting Likud, where far-right members revolted over the Gaza withdrawal. He suffered a stroke in January and fell into a coma.
BATTLE
Some 60,000 West Bank settlers could be affected by Olmert's plan, far more than the 8,500 removed from Gaza. Around 240,000 Israelis live among 2.4 million Palestinians in the West Bank, territory Israel captured in the 1967 Middle East war.
"This is a battle for our homes," said Eitan Meshulam, a West Bank settler.
Israeli right-wingers say removing more settlements would reward and encourage Palestinian violence.
Opinion polls published at the close of a lacklustre but high-stakes campaign had predicted a Kadima victory, with Labour a likely coalition partner.
A new coalition government is also likely to include at least one of several smaller parties.
Olmert's policy of imposing Israel's borders on its own terms ignores an international peace "road map", which envisaged a cessation of violence and the start of mutual steps leading to the creation of a Palestinian state alongside a secure Israel.
Neither side has fulfilled its commitments under the plan sponsored by the "Quartet" of Middle East mediators -- Russia, the United States, the European Union and the United Nations.
In Khartoum, Arab leaders at an annual summit promoted an offer of peace with Israel in return for land. They also rejected unilateralism and called for a return to peace talks sponsored by the Quartet.
- REUTERS
Exit polls project Kadima victory in Israel vote
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