Israel's Netanyahu faces coalition challenge

Israel's rightwing Prime Minister Benjamin Netanyahu, who narrowly won Tuesday's election ahead of a new centrist party, now has the complicated task of forming a new coalition government.

Despised by much of the local media, and the target of jabs by foreign leaders, the 63-year-old Netanyahu was riding high in polls ahead of the election and had been expected to emerge with a strong rightwing mandate.

But exit polls showed his Likud-Yisrael Beitenu list winning only 31 seats in the 120-seat Knesset, followed by the brand-new centrist party Yesh Atid.

The biggest challenge had been seen coming from the far-right national religious Jewish Home, which had experienced a revival under charismatic new leader Naftali Bennett, but the party appeared to have come in fourth.

Netanyahu, once dubbed The Magician for his ability to outwit his political rivals, will now need his famous horse-trading skills to build a government with a working majority.

Smooth-talking and ever ready with a sound bite in slick American-English, Netanyahu became Israel's youngest premier in 1996, aged 45. But three years later, he was defeated by Labour chief Ehud Barak campaigning under the slogan "Anyone but Bibi".

Six years later, he served as both foreign minister and finance minister under Likud premier Ariel Sharon.

In late 2005, he took over as Likud leader after Sharon left to found Kadima, and led the party to a humiliating defeat in the 2006 election.

But the party bounced back in 2009.

Known as "Bibi", the stocky leader with the trademark comb-over has had a difficult relationship with several world leaders, notably US President Barack Obama.

Over the past four years, the two have clashed over the peace process with the Palestinians and how to handle Iran, which Israel and much of the West see as a guise for developing a weapons capability, a charge Tehran denies.

Media reports ahead of the election suggested that US President Barack Obama saw Netanyahu as a "political coward" over the peace process, with his ongoing settlement activity was moving Israel "down a path toward near total isolation".

In 2011, Obama was overheard discussing Netanyahu with then French president Nicolas Sarkozy who said: "I can't stand him any more; he's a liar."

"You may be sick of him, but me, I have to deal with him every day," Obama retorted.

Born on October 21, 1949, Netanyahu was educated in the United States after his father Bentzion, a history professor, was considered so right-wing in the Labour-dominated Israel of the time that he was forced to leave.

Before attending the prestigious Massachusetts Institute of Technology, he served in an elite Israeli army commando unit, took part in a number of operations and was wounded. He was discharged with the rank of captain.

He was deeply affected by the death of his elder brother Jonathan, who was killed leading the legendary 1976 Israeli commando raid on an Air France plane hijacked by Palestinians to Entebbe, Uganda.

Netanyahu then plunged into studies of terrorism, writing three books on the subject.

His career took off when he was posted to Israel's embassy in Washington and later made ambassador to the United Nations, before he launched a political career that has also seen him hold the foreign affairs and finance portfolios.

A staunch conservative, he only accepted the concept of a Palestinian state for the first time in 2009. Yet he has done little to move forward in negotiations, and his government has pushed through the highest number of settler homes in a decade.

He has doggedly insisted that the Palestinians recognise Israel as a "Jewish state" and has rejected their condition for restarting stalled peace talks -- freeze on settlement construction.

Netanyahu has vowed not to remove any Jewish settlements and has ruled out any future freeze on construction beyond the so-called Green Line, the line that existed before the 1967 Six-Day War.