Clouded by a series of looming corruption indictments, Netanyahu is seeking a fourth consecutive and a fifth overall term in office, which would make him Israel's longest-ever serving leader, surpassing founding father David Ben-Gurion.
He faces a stiff challenge from retired military chief Benny Gantz, whose Blue and White party has inched ahead of Netanyahu's Likud in polls. Netanyahu still appears to have the best chance of forming a coalition, though, with a smattering of small nationalist parties backing him. Gantz cast his ballot in his hometown of Rosh Haayin in central Israel alongside his wife, Revital, and called on all Israelis to get out and vote, saying they should "take responsibility" for their democracy.
"Go to vote. Choose whoever you believe in. Respect each other and let us all wake up for a new dawn, a new history," he said.
The election has emerged as a referendum on Netanyahu and his 13 years overall in power, with the existential questions facing Israel rarely being discussed in the campaign. The 69-year-old prime minister has been the dominant force in Israeli politics for the past two decades and its face to the world.
But his various corruption scandals have created some voter fatigue, and in recent days he's vowed to annex Jewish West Bank settlements if re-elected — a prospect that could doom the already slim hopes of establishing a Palestinian state alongside Israel, which Netanyahu has previously wavered on.
"It's about time for a change," said Barry Rifkin, a Jerusalem resident.
Polling stations opened at 7 a.m., with exit polls expected at the end of the voting day, at 10 p.m. Some 6.4 million eligible voters will be able to cast their ballots at more than 10,000 stations. Some 40 parties are running, but no more than a dozen are expected to make it into parliament. Election day in Israel is a national holiday, with turnout expected to be high in good weather.
Official results will begin streaming in early Wednesday, but it may take far longer for a final verdict to come through, given the fragmented state of Israeli politics.
As many as a half-dozen parties are teetering along the threshold for entering the Knesset, or parliament. A failure by any of these parties to get the required 3.25 percent of total votes cast could have a dramatic impact on who ultimately forms the next coalition. The Israeli government needs a parliamentary majority to rule, and since no party has ever earned more than half of the 120 seats in the Knesset, a coalition is required.
Netanyahu and Gantz have ruled out sitting together in government, so the next prime minister will likely come down to how many supporters each candidate can recruit.
Israel's president, Reuven Rivlin, could play an important role. Though largely a ceremonial post, the president is responsible for choosing the candidate with the best chance of building a stable coalition government as prime minister.
In the campaign's final days, Netanyahu has veered to the right and embarked on a media blitz in which he portrays himself as the underdog and frantically warns that "the right-wing government is in danger."
His nationalist allies, however, see the move as a repeat of his 2015 election tactic to draw away their voters as he did four years ago when on election day, he warned of Arabs turning out in "droves." The scare tactics were seen as helping him seal a come-from-behind victory.
Arab turnout will be a major issue this time as well. Netanyahu's campaign against Arab politicians, together with the new alliance with anti-Arab extremists and the passage of last year's contentious nation-state law, which enshrined Israel as the homeland of the Jewish people alone, have deepened calls for a ballot boycott in Arab communities.
But some hope these blows will have the opposite effect, fueling enough frustration to drive up the Arab participation rate, which is typically lower than that of Israeli Jews. A big Arab turnout could push smaller right-wing parties into the margins and even threaten Netanyahu's long rule.
The Palestinian issue has been largely sidelined in the election campaign that has been long on scandal and short on substance. But in a reminder, the military says it imposed a 24-hour closure on the West Bank and Gaza throughout election day, based on its security assessments.
Even if he is re-elected, Netanyahu could have a difficult time governing. Some of his allies have indicated they will no longer back him if formal charges are filed.
Israel's attorney general has recommended indicting him on bribery and breach of trust charges in three separate cases. Rivals have also begun to question a deal in which Netanyahu reportedly earned $4 million on a German submarine sale to Egypt by owning shares in one of the German manufacturer's suppliers.
Netanyahu denies any wrongdoing and claims the accusations are part of a liberal media's orchestrated witch hunt against him.
Netanyahu has generated much of his popularity from projecting a tough image in the face of Iran's rising power and for keeping Israel safe and prosperous in a hostile region.
But in Gantz he has encountered the rare opponent who can match his security credentials. Along with two other former military chiefs on his ticket, Gantz has attacked Netanyahu for failing to halt rocket fire from the Hamas-ruled Gaza Strip. The telegenic Gantz, who has been vague on key policy fronts, has presented himself as a clean, scandal-free alternative to Netanyahu and has vowed to heal the rifts the longtime leader has created in Israeli society.