Some 9,500 polling stations across Israel opened at 7 am (0500 GMT) Tuesday morning as voters were set to elect a new parliament - the 18th in the country's 60-year history, dpa reported.
Approximately 4.8 million eligible voters are to chose from 33 lists in the proportional elections, with pre-election surveys predicting a tight race between the hawkish Likud party, headed by Benjamin Netanyahu, and the centrist Kadima party led by Foreign Minister Tzipi Livni.
Moldovan-born, immigrant Avigdor Lieberman, of the ultra-nationalist Israel Beitenu party, was also predicted by opinion polls to emerge strong and in a close race for the third and fourth place with the Labour Party of Defence Minister Ehud Barak.
Voting ends at 10 pm (2000 GMT) and Israel's three television channels will broadcast the results of exit polls. First official results are not expected until Wednesday.
Election day in Israel is a day off, but public transportation is working as usual to allow citizens to go out and vote. The Israeli military imposed a closure on the West Bank, allowing no Palestinians through military checkpoints on roads heading into Israel, to prevent possible militant attacks on election day. The closure is scheduled to be in place until midnight.
Israeli police are also on high alert in the Arab town of Umm el-Fahm, northern Israel, where an extreme-right Jewish activist, Baruh Marzel, has insisted on heading a polling station. Israeli authorities have condemned his insistence on his presence in a polling station at an Arab town as a provocation, but said they could not prevent it, as that could set a dangerous precedent harming Israeli democracy.
Local leaders warned they would not allow Marzel entry into their town. Many Arab-Israeli residents in Umm el-Fahm say they plan to boycott the election or submit a white ballot. Turnout among Arab Israelis is expected to be lower than in previous elections, as many plan to abstain to protest Israel's recent Gaza offensive.
Voter turnout among the Israeli public in general, which stood at 63.5 per cent in the last elections in March 2006 and has been on a steady decline over the past decade, was also expected to be relatively low.
Many Israelis have expressed dispassion at the election, which comes after one of the shortest campaigns in their country's history, cut short by the Gaza offensive that ended just three weeks ago.
The Central Election Commission (CEC) said it plans to publish voter turnout figures every two hours from 10 am (0800 GMT). The forecast for bad weather could further impact the turnout.