Prime Minister, Benjamin Netanyahu, faces a challenge from a Centre-left Alliance that has promised to restore ties with the Palestinians and the international community.
Candidates from both parties spent Monday making one last appeal to voters. Neither side is expected to get more than a quarter of the votes.
While results could be declared soon after the close of polls, a definitive conclusion appears likely to take some time.
A lengthy period of negotiations over the formation of the next coalition government could follow.
No party has ever won an outright majority in Israel’s election, meaning it has always been governed by a coalition.
Much of the focus of the campaign has been on international issues, from Israel’s relationship with the United States to concerns over Iran’s nuclear programme.
But many of the candidates have concentrated on socio-economic problems in Israel, including the high cost of living and slow economic growth.
The future of the city of Jerusalem has been a central election issue.
Mr Netanyahu has consistently accused his centre-left challengers of being willing to relinquish Israel’s claim to Jerusalem as its indivisible capital in peace talks with the Palestinians.
Palestinians seek East Jerusalem – occupied by Israel since the 1967 Middle East war – as the capital of a future Palestinian state.
But Zionist Union party co-leader, Yitzhak Herzog, has accused Mr Netanyahu of “panicking”.
Visiting the Western Wall, one of the holiest sites in Judaism, on Sunday, he pledged to “safeguard Jerusalem and its residents in actions, not just words, more than any other leader”.