Israel was bracing itself for weeks of political gridlock on Wednesday, after voters handed a narrow victory to Tzipi Livni and her centrist Kadima party but left her with no obvious partners to form a governing majority.

With 99 per cent of votes counted, Kadima looked set to capture 28 out of 120 seats in the Israeli parliament, making it the largest faction in the Knesset. Benjamin Netanyahu, the leader of the right-wing Likud party and for weeks the clear frontrunner, is set to command 27 seats.