Israel's political parties were engaged in a flurry of negotiations on Thursday to form a coalition government after final results from this week's general election gave Tzipi Livni's centrist Kadima party a one-seat advantage.

Benjamin Netanyahu, leader of Israel's Likud party, greets supporters at the party's election headquarters in Tel Aviv on Wednesday. (Kevin Frayer/Associated Press)

The official results from Tuesday's vote, released on Thursday after tallying the ballots of Israeli soldiers, gave 28 seats in the 120-member Knesset to Kadima, while Netanyahu's conservative Likud party won 27 seats.

Both Livni, the country's foreign minister and chief negotiator with the Palestinians, and Netanyahu, who previously served as prime minister, claimed victory after the vote and insisted they will lead the next government.

Avigdor Lieberman's ultra-nationalist Yisrael Beteinu party had a strong showing, gaining four seats to finish with 15 seats.

Tzipi Livni, leader of Israel's Kadima party, reacts during an election night rally in Tel Aviv on Tuesday. (Peter Dejong/Associated Press)

Under Israel's complex parliamentary system, the party leader with the most seats must consult with the country's president and demonstrate he or she has the support to form a coalition government. The leader Shimon Peres chooses will have up to 42 days to form a government.

It is widely believed the hawkish Netanyahu holds the advantage in coalition talks, despite Livni's seat lead, as right-wing and religious parties hold a majority.

But ultra-Orthodox parties have in the past refused to sit with secular parties such as Lieberman's Yisrael Beteinu, which calls for reforms in Israel's civilian marriage laws.

Another scenario could see Kadima and Likud join forces with the support of smaller parties, although it is unclear at this stage whether either leader would accept the other as prime minister.

Defence Minister Ehud Barak's Labour party, Israel's ruling party for more than half the country's history, had its worst ever showing, winning just 13 seats. The Orthodox Shas party won 11 seats, while the leftist Meretz party was reduced to only three seats.

Netanyahu appeals for national unity

The election has raised doubt about the prospects of peace negotiations in the Mideast.

The U.S.-educated Netanyahu has campaigned against any territorial concessions to the Palestinians — a decided break from the land-for-peace approach that has dominated negotiations in recent years.

The Likud leader told Israeli newspaper Haaretz on Wednesday that he planned to form a "wide coalition and appealed to opposing parties to put aside their political differences for the sake of national unity.

"I will tell the other parties, 'If you're worried about national interest, lay aside your political interests and join a government under my leadership,'" he said.

Livni pledged to make every effort to form a government "for my voters."

Netanyahu has also said Israel's recent 22-day military offensive in the Gaza Strip against Hamas militant rocket attacks did not go far enough and has vowed to topple the Islamist group, which has controlled the territory since June 2007.

Livni, who took over Kadima three months ago after outgoing Prime Minister Ehud Olmert resigned to battle corruption charges, supports a two-state solution and has acted as Israel's lead negotiator with West Bank-based President Mahmoud Abbas.

After taking control of Kadima in September, Livni was unable to cobble together a coalition of moderates to continue governing.

Lieberman, a potential kingmaker, is even less inclined to support a two-state solution. His party calls for redrawing Israel's borders in a way that would transfer areas with large Arab concentrations into Palestinian jurisdiction.

With files from the Associated Press