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Jerusalem — Israel’s main opposition party, Labour, which is seen capturing up to 17 seats, has already ruled out a repeat of 2009, when it initially entered Netanyahu’s cabinet, promising to promote peace negotiations with the Palestinians.
U.S.-brokered talks collapsed just a month after they started in 2010 following a row over settlement building, and have laid in ruins ever since. Netanyahu blamed the Palestinians for the failure and says his door remains open to discussions.
Palestinian President Mahmoud Abbas says he won’t return to the table unless there is a halt to settlement construction.
That looks unlikely, with Netanyahu approving some 11,000 settler homes in December alone, causing further strains to his already notoriously difficult relations with U.S. President Barack Obama, who was sworn into a second term on Monday.
Tuesday’s vote is the first in Israel since Arab uprisings swept the region two years ago, reshaping the Middle East.
Netanyahu has said the turbulence - which has brought Islamist governments to power in several countries long ruled by secularist autocrats, including neighbouring Egypt - shows the importance of strengthening national security.
If he wins on Tuesday, he will almost certainly put Iran back to the top of the global agenda. Netanyahu has said he will not let Tehran enrich enough uranium to make a single nuclear bomb - a threshold Israeli experts say could arrive as early as mid-2013.
Iran denies it is planning to build the bomb, and says Israel, widely believed to have the only nuclear arsenal in the Middle East, is the biggest threat to the region.
The issue has barely registered during the election campaign, with a poll in Haaretz newspaper on Friday saying 47 percent of Israelis thought social and economic issues were the most pressing concern, against just 10 percent who cited Iran.
One of the first problems to face the next government, which is unlikely to take power before the middle of next month at the earliest, is the stuttering economy.
Data last week showed the budget deficit rose to 4.2 percent of gross domestic product in 2012, double the original estimate, meaning spending cuts and tax hikes look certain.
Polling stations open at 7 a.m. (0500 GMT) and close at 10 p.m.. Immediately after voting ends, Israeli media release exit polls, with official results due the next morning and party leaders already beginning informal coalition talks