With 97 percent of ballots counted, Likud stood even with the centrist Blue and White Party led by former military chief Benny Gantz.
Both sides claimed victory in the hours after the voting ended.
"Two, they certainly can't hide the sunlight of hope that we have brought to the people of Israel and Israeli society".
"We are the victors", said Gantz, a former military chief fighting his first election.
The big losers of this election appear to be the left parties, including Labor, which is projected to lose 13 seats, Meretz, projected to lose one, and the United Arab List-Balad, which shaved 3 seats off its Knesset presence.
Both Netanyahu and Gantz claimed victory after the initial exit surveys that gave Blue and White the most seats.
A spokesperson for the Central Elections Committee told The Times of Israel that all votes would be counted by Thursday afternoon.
Netanyahu has already phoned many probable partners in his latest coalition, nearly certainly a government of the right.
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Wednesday's summing comes after MPs voted by 420-110 to approve a motion to seek an Article 50 extension and delay the date of Brexit to 30 June.
In large part, the campaign was a referendum on Netanyahu's character, as Attorney General Avihai Mandelblit has said he intends to charge the 69-year-old in three graft cases.
A close result in the election would put smaller parties in a powerful position, turning marginal political figures into kingmakers.
Italy's Deputy Prime Minister Matteo Salvini on Wednesday tweeted congratulations to his "friend" Netanyahu who looks.
Likud, which gained five more seats compared with the 2015 elections, needs 61 seats to form the government. Gantz's Blue and White party said in a statement. Because a simple majority is needed to attain power, and Netanyahu is expected to combine the seats won by the the two ultra-orthodox religious parties with those of other conservative parties, political experts believe he will be able to cobble together a coalition with 65 seats.
The result was hailed by Donald Trump, who said the prime minister's victory meant "a better chance" for peace between Israelis and Palestinians, but was met with dismay by Palestinians. Gantz, a career soldier who retired as chief of staff in 2015, entered politics past year for the first time, joining forces with two other former army chiefs. The telegenic Gantz, who has been vague on key policy fronts, has presented himself as a clean, scandal-free alternative to Netanyahu.
Palestinian official Saeb Erekat lamented that the Israelis voted to maintain "the status quo".
Tel Aviv Stock Exchange main indexes were up almost one per cent in late trading on Wednesday, displaying confidence in a veteran prime minister who has overseen a humming economy and blunted various security threats, including from Syria.
"They want their occupation to be endless", he said.