Singling out the US and its President Donald Trump, Netanyahu said that Israel was at a historical juncture ahead of great security and diplomatic challenges and opportunities.
As counting got underway, exit poll projections showed Netanyahu the country's longest-serving Prime Minister and former military chief Benny Gantz locked in a tight race.
Just after polling stations closed across Israel, the country's three main TV stations flashed the result of their individual exit polls showing Netanyahu's right-wing Likud party neck and neck with Gantz's centrist Blue and White Party.
"Negotiations with Trump will decide Israel's future for decades, so Israel needs a strong, stable and Zionist government," Netanyahu said, according to Efe news. "We need to make sure we maintain our achievements."
"There won't and cannot be a government supported by anti-Zionist Arab parties who deny the existence of Israel as a Jewish and democratic state, who glorify bloodthirsty terrorists who murder our soldiers. This cannot be, we cannot accept it," he added.
Netanyahu, who has been leading the executive since 2009 (and had previously served as Premier between 1996-99) said he had already initiated negotiations with Likud's potential coalition partners on the right.
"They all committed to pursue our goals together," he said, as his supporters chanted "We don't want unity!" - a reference to speculation that Likud could ally with its main rival Blue and White in these polls.
Netanyahu, who is vying to win a record fifth term in office, declined to name Gantz in his speech or hint at any possible deal with the centrist coalition.
He has pledged to annex Jewish settlements and a swathe of other territory in the occupied West Bank if he is returned to power. Palestin, who seek a state in the West Bank and Gaza, with its capital in occupied East Jerusalem, have warned such a move will kill any hopes for peace.
Gantz has not advocated any form of annexation though his position on the creation of a Palestinian state is unclear.
Like Netanyahu, he has ruled out ever dividing Jerusalem, which Israel considers its capital.
On Wednesday morning, Yisrael Beiteinu's leader Avigdor Lieberman, reiterated that he would only support a government comprising both Likud and Blue and White.
However, Blue and White has ruled out sitting with Netanyahu in a coalition. Instead, Gantz offered to form a national unity government and said he had already reached out to the heads of the two centre-left Zionist parties, the Labour party and the Democratic Union.
( With inputs from IANS )