Foreign Minister Tzipi Livni, the chairwoman of Israel's governing Kadima Party, declared victory early Wednesday in an undecided race with hawkish Likud leader Benjamin Netanyahu.

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Early exit polls predicted a narrow lead for Kadima, but placed the right-wing Likud Party in a better position to form a coalition, due to a strong showing by nationalist parties.

Addressing a crowd of supporters while the ballots were being counted, Livni said "today the people chose Kadima and we will form the next government."

She reiterated her offer to Netanyahu to join a national government under her leadership, saying "I offered this to you before this election was decided upon, to join a national government, led by me, to battle those challenges facing Israel today. You turned me down and said that it was up to the people to decide. Well, today the people chose Kadima."

"The right thing to do now is to respect the wishes of the voters," she added.

Earlier Wednesday, Netanyahu declared victory, saying he would become Israel's next prime minister because hardliners outnumber moderates in the incoming parliament.

Referring to Netanyahu's remarks, Livni said "I entered politics when there were camps fighting each other to the death. Today I hear about the 'nationalist camp.' The land of Israel does not belong to the right wing, just as peace does not belong to the left. Just as no camp has a monopoly over preserving Israel as a Jewish nation, even if it does serve certain people politically."

Livni also addressed the need to change the method of government in Israel, saying "we understand today the need for governmental stability and changing the method in order to fulfill the voter's will. This is why I intend to work toward changing the voting method so that the will of the voters can be manifested in a stable government that would last over time."

The foreign minister also thanked Ehud Olmert and said that the outgoing prime minister called her to congratulate her and fellow Kadima members. "He deserves Kadima's gratitude."