Israel's Arab parties could be the largest non-ruling bloc in parliament if a national unity government emerges from Tuesday's election.

A surge in turnout meant the Arab-dominated Joint List now have 13 of the Knesset's 120 seats - making it the third largest grouping.

The party still lags behind Prime Minister Benjamin Netanyahu's right-wing Likud party, which has 31 seats, and Benny Gantz's Blue and White, which has 33.

Candidates in the election raise their arms in celebration as the first of the exit polls came in on September 17. Pictured from left to right: Ofer Cassif, Heba Yazbak, Osama Saadi, Mtanes Shehadeh, Ayman Odeh, Ahmad Tibi, Aida Touma and Iman Khatib Yassin

But if a unity government takes shape the Joint List would be the largest opposition grouping in parliament - despite Gantz rebuffing Netanyahu's initial invitation.

No party drawn from the 21 percent Arab minority has ever been part of an Israeli government.

And if Joint List head Ayman Odeh, 44, becomes opposition leader, he would receive monthly briefings from the Mossad intelligence agency.

He would also meet visiting heads of state, among other perks, and provide an outlet to voice Arab complaints of discrimination against them.

Arab parties that hold different views to those drawn from the country's Jewish majority will be given a bigger platform.

'It is an interesting position, never before held by someone from the Arab population. It has a lot of influence,' Odeh told reporters outside his home in Haifa, a mixed Arab and Jewish city in northern Israel.

But although the Joint List will be the single largest group, other opposition parties combined would have enough seats to block his appointment through an absolute majority vote, analysts said.

Israel's head of the mainly Arab Joint List alliance Ayman Odeh casts his ballot accompanied by his family during Israel's parliamentary election at a polling station in Haifa

'There's no way the other parties will agree to have Ayman Odeh as head of the opposition, and grant our community recognition and legitimacy,' said Aida Touma-Sliman, an Arab lawmaker from Odeh's Hadash faction.

Arab lawmakers often call for an end to Israel's occupation of the West Bank and Gaza, a Palestinian state with East Jerusalem as its capital and the dismantling of Israel's settlements in the West Bank.

The Arab community in Israel is mainly descendants of the Palestinians who remained in Israel after its creation in 1948.

And some in the younger generation still identify as Palestinian.

They make up 1.9 million of Israel's nine million population, and say they face discrimination in health, education and housing.

They are living in cities such as Nazareth and Acre in the north and Bedouin towns in the southern Negev desert.

An Arabic-language election banner displaying a portrait of Arab Israeli candidate Waleed Taha is pictured in the Israeli town of Kfar Qassem

The Mossawa Center rights group says Israel's state budget often favours Jews, allocating more funds to Jewish localities and schools than to Arab ones.

Some 47 per cent of Arab citizens live in poverty, far above a national average of 18 per cent, it says.

But Netanyahu's Likud party's 15 billion shekel ($4.19 billion) investment plan for the Arab sector during the last parliament was 'the largest such commitment in Israel's history', according to Eli Hazan, Likud's foreign affairs director.

In Tuesday's election, Odeh and his group of four Arab parties ran a united front and Arab turnout increased sharply.

That helped them regain seats lost in April when they were divided and turnout plummeted.

Eid Jbaili, a 55-year-old gym teacher from Haifa, said he boycotted the April election but voted on Tuesday 'because my community's leaders showed they could exude unity in the face of adversity'.

Retired Israeli General Benny Gantz, leader and candidate of the Israel Resilience party that is part of the Blue and White (Kahol Lavan) political alliance looks on during a press conference in Tel Aviv, Israel

But Jbaili was unsure an Arab opposition leader would be able to provide anything beyond a 'small symbolic win' for his community.

'We still won't be decision-makers in this country,' he said.

The Joint List held up its stronger showing on Tuesday's rerun as a victory over what it described as an 'unprecedented campaign of incitement against the Arab public' by Netanyahu and right-wing parties.

Netanyahu made allegations of voter fraud in Arab communities an issue in his election campaign, and sought to deploy cameras to the country's polling centres in what Arab leaders described as an attempt to scare off voters.

Israel's top court refused to allow cameras.