Prime Minister Benjamin Netanyahu has won a clear victory in Israel's Parliamentary elections, Israeli media reported, after 99 percent of the ballot boxes were counted.

Netanyahu's Likud party captured at least 29 seats in Parliament, sweeping past the rival Zionist Union alliance, which won 24 seats, according to Yediot Ahronotnewspaper on Wednesday.

Reuters news agency reported that Israeli opposition leader Isaac Herzog has called Netanyahu to congratulate him on his election victory. 

On Tuesday night, Netanyahu had already claimed victory, making it all but certain that he would form a new government and serve a fourth term.

"Against all odds we achieved a great victory for the Likud. We achieved a great victory for the national camp under the leadership of the Likud. We achieved a great victory for our people of Israel!" Netanyahu told cheering supporters at campaign headquarters in Tel Aviv.

"Now we have to build a strong and stable government," he added.

He had put security at the forefront of his campaign, arguing he is the only one capable of protecting Israel from an Iranian nuclear threat and vowing never to allow the Palestinians to establish a capital in East Jerusalem.

The Palestinians vowed to step up their diplomatic campaign for statehood.

"It is clear that Prime Minister Benjamin Netanyahu will form the next government, so we say clearly that we will go to the International Criminal Court in the Hague and we will speed up, pursue and intensify" all diplomatic efforts, chief negotiator Saeb Erakat told AFP news agency.

US-Israel tensions

Ahead of the final result of the voting, US President Barack Obama said that he is confident that strong US-Israeli ties will continue regardless of the victor.

Al Jazeera's Rosiland Jordan, reporting from Washington DC, said that the White House will be facing "key questions" on how to deal with Netanyahu, who has a history of frosty relations with Obama. 

"There hasn't been a close personal relationship, as it were, between Netanyahu and President Barack Obama for years now," our correspondent said. 

"There's also the question of Middle East peace talks, and the Palestinians own political frustrations. Much is resting on the decision of formation of a new Israeli government in the coming days."

If Netanyahu manages to pull together a workable coalition, it would put him on track to become Israel's longest-serving prime minister, a label held by the country's founding father, David Ben-Gurion.

While Likud is the largest party, the process of forming a coalition is likely to be difficult. It needs 61 seats in the Knesset and crossing that threshold will be challenging given the amount of division across Israel's political landscape.

Netanyahu's move to the right, playing up fears of the spread of Islamist groups, promising no concessions to the Palestinians and raising alarm about growing support for Arab-Israeli parties, looks to have spurred his base into action.