JERUSALEM (CBS News/CBSDC/AP) — Israelis are voting in early parliamentary elections following a campaign focused on economic issues such as the high cost of living, rather than fears of a nuclear Iran or on the Israeli-Arab conflict.

Prime Minister Benjamin Netanyahu appealed to his hard-line base at the last minute, saying a Palestinian state would not be established if he is elected to a fourth term. His remarks could further sour ties with the United States.

Netanyahu’s main challenger is Isaac Herzog of the center-left Zionist Union.

Voters are electing a 120-member parliament, casting ballots for a party list. It typically takes weeks of negotiations for a governing coalition to be formed.

It is a mild, sunny day in Israel, perfect for getting to the polls, reports CBS News correspondent Barry Petersen. Election Day in Israel is a holiday, so no one has an excuse not to vote. And the indications are they will — in record numbers.

In a video posted on Facebook, Netanyahu said “the right-wing government is in danger.”

“Arab voters are coming out in droves to the polls. Left-wing organizations are busing them out,” Netanyahu said, according to a translation from Haaretz. “Get out to vote, bring your friends and family, vote Likud in order to close the gap between us and ‘Labor.'”

Isaac Herzog’s party has been polling slightly ahead of Netanyahu’s Likud, but neither camp has a clear majority. Israel’s political landscape is fractured, and several centrist parties will likely determine who will be the next prime minister.

After voting Tuesday, Netanyahu ruled out a coalition with Herzog and reiterated in an interview with Israel TV’s Channel 10 that a Palestinian state would not be created on his watch.

Herzog, who has vowed to revive peace efforts with the Palestinians, repair ties with the U.S. and reduce the growing gaps between rich and poor, confidently predicted an “upheaval” was imminent.

“Whoever wants to follow Bibi’s (Netanyahu’s) path of despair and disappointment will vote for him,” Herzog said after casting his vote. “But whoever wants change, hope, and really a better future for Israel, will vote the Zionist Camp lead by me.”

Meanwhile, Herzog signaled he is going back on what was perceived as an unpopular power-sharing deal with the co-leader of the Zionist Union, former Foreign Minister Tzipi Livni. Under that deal, Herzog and Livni would each have served as prime minister for two years if they won the elections.

Also, police said they arrested an Israeli soldier on suspicion of incitement of violence. The soldier wrote on Facebook that if a leftist were to rise to power, the soldier would follow in the footsteps of Israeli extremist Yigal Amir, who assassinated dovish Prime Minister Yitzhak Rabin in 1995.

Netanyahu’s late stand on such a state represented a reversal of his position from six years ago and part of what people in Israel were calling frantic last-minute campaigning ahead of parliamentary elections, Petersen reports.

As Netanyahu’s popularity has dropped in recent days, he has appeared to some as increasingly desperate, Petersen says.

Netanyahu called this snap election three months ago, expecting a break-no-sweat cruise to reelection.

Instead, his opponents gained steam.

“I would say there is a feeling that there is a kind of quiet rebellion against the rule of Benjamin Netanyahu,” said Israeli author Ari Shavit.

Critics say Netanyahu ignored pocketbook issues such as high taxes and real estate prices that tripled in the last decade.

With voters at the polls, the best guess on Netanyahu’s re election is, in the words of one observer, a tossup, Petersen says.

(TM and © Copyright 2015 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2015 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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