The balloting will likely leave Netanyahu, 63, at the helm of an even more hawkish coalition than the current one - dominated by hard-liners opposed to concessions that could bring Palestinians back to the negotiating table. Such a result would probably keep peace efforts deadlocked and put Israel on a path to further run-ins with key ally Washington.
Newly re-elected President Barack Obama has had a turbulent relationship with Netanyahu and the two leaders could find themselves on a collision course in their new terms. In London, British Foreign Secretary William Hague urged Obama to now make the Middle East peace process his top priority.
"We are approaching the last chance to bring about such a solution," Hague warned.
For the first time in decades, the conflict with the Palestinians was not the defining issue in the election campaign after many Israelis came to believe a peace deal is impossible.
That deprived Netanyahu's more moderate opponents of their traditional focus for elections and the fractured center-left camp failed to unite behind a viable alternative candidate, practically ensuring another Netanyahu victory.
Yifat Segev, like many Israelis, said she was undecided until she stepped into the polling booth and noted the lack of excitement that has characterized previous races. In the end, she chose centrist newcomer Yair Lapid over Netanyahu, known by his nickname Bibi.
"I figured Bibi's going to be prime minister anyway, so I might as well give some power to Lapid," said the 31-year-old mother of three from the Jerusalem suburb of Mevasseret Zion.
Netanyahu is widely seen, even by some opponents, as the man best suited to lead the country at a delicate time.
He has maintained a lead with a message that the country needs a tough-minded and experienced leader to face down dangers including the Iranian nuclear program, potentially loose chemical weapons in Syria and the rise of fundamentalist Islam in Egypt and other Arab countries amid the Arab Spring.
However there was still room for a surprise outcome. Election officials reported relatively high turnout compared to previous years, boosted by sunny, spring-like weather. A heavy turnout could favor Netanyahu's opponents, whose voters tend to have a lower participation rate than the highly motivated hard-liners.
In addition, opinion polls that predicted Netanyahu's win have often been wrong in the past.
"The one thing that is worrying us is that people aren't going out to vote," Netanyahu told reporters at the headquarters of his Likud Party in Tel Aviv. "This thing hasn't been decided yet."
Netanyahu was smiling when he arrived early at a heavily secured polling station in Jerusalem with his wife, Sara, and two sons, both first-time voters.
Many opponents yielded the security issue to Netanyahu and instead campaigned on economic concerns, such as the high cost of living and the government's much-maligned practice of giving generous handouts and draft exemptions to the ultra-Orthodox Jews.
While Israel's economy has remained on solid footing, Netanyahu's government has run up a huge deficit that could force steep budget cuts in coming months.
Only one major contender, former Foreign Minister Tzipi Livni, campaigned on a platform centered on the need for peace with Palestinians. Her new Movement party was expected to emerge as a midsize faction.
Livni implored voters to think about the "big decisions" at hand.
"The vote I have cast includes the hopes of all the people who don't want four more years of Netanyahu and this government," she said.
In the run-up to the election, opinion polls universally forecast Netanyahu's Likud-Yisrael Beitenu alliance emerging as the largest single bloc, controlling roughly one-quarter of parliament's 120 seats and in a strong position to form a majority coalition.
Along with other nationalist and religious parties that traditionally support him, Netanyahu is expected to be able to easily secure a majority of 61 seats or more.
Should the right-wing and religious parties somehow fail to muster a majority, there will be a mad scramble on the center-left to try to form a coalition on their own.
Under that scenario, Labor Party leader Shelly Yachimovich could end up as prime minister. The former radio journalist who once backed Israel's Communist party campaigned on a promise to narrow the gap between rich and poor and has said she will not sit in a Netanyahu government. But such an outcome appeared unlikely.
In all, 32 parties were running. Israel has historically had multiparty governments because no party has ever won an outright majority in the country's 64-year history. Polls close at 10 p.m. local time (3 p.m. EST, 2000 GMT), with preliminary results to be released shortly after that.
In a sign of the times, many Israelis advertised their voting choice by photographing their completed ballot and uploading it to Facebook.
If victorious, Netanyahu is expected to reach across the aisle and court at least one of the more centrist parties opposing him. This would reduce his reliance on the hard-liners and present a more palatable face to the outside world.
But it remains unclear whether he would be able to do so, as it would require concessions on key economic or political issues that would alienate his core supporters.
A shift by Netanyahu away from his tough line toward the Palestinians appears unlikely. Netanyahu himself has only grudgingly voiced conditional support for a Palestinian state, and his own party is now dominated by hard-liners who oppose even this.
Likud primaries robbed the party of its most moderate figures, and up to one-sixth of the incoming legislature is expected to be settlers who advocate holding on to captured land the Palestinians want for a future state. That could translate into a more hawkish government.
A likely coalition partner, Naftali Bennett of the surging Jewish Home Party, has even called for annexing large parts of the West Bank, the core of any future Palestinian state.
Motti Saban, a 25-year-old student in Jerusalem, said he would vote for Jewish Home.
"We are right-wing and we want to see a parliament that is more right-wing than now," Saban said. "Social issues affect us all, but I won't give up Jerusalem. That's more important," Saban said.
Netanyahu has won praise at home for drawing the world's attention to Iran's suspect nuclear program and for keeping the economy on solid ground at a time of global turmoil.
But internationally, he has repeatedly clashed with allies over his handling of the peace process. Peace talks with the Palestinians have remained deadlocked throughout his term, in large part because of his continued construction of Jewish settlements in the West Bank and east Jerusalem.
The Palestinians claim both areas and the Gaza Strip, all captured in the 1967 Mideast war, for a future state. They refuse to negotiate while settlement construction continues.
Netanyahu has said talks should resume without preconditions. He also rejects a return to Israel's 1967 borders.
The international community has shown increasing impatience with Netanyahu. In November, the U.N. General Assembly overwhelmingly voted in favor of establishing a Palestinian state in the 1967 boundaries.
(Copyright 2013 by The Associated Press. All Rights Reserved.)