The stakes, according to experts, are high as the fate of the occupied territories has dominated the campaign.
"We are having an election that ideologically is probably the most important that we've ever had," political analyst Reuven Hazan told Reuters.
According to published opinion polls, the Kadima Party is the clear frontrunner. Kadima is projected to win 35-40 seats, which would still leave it far short of a majority in the 120-member parliament. The center-left Labor Party trails with an estimated 19 seats and the Likud Party, now under the leadership of former Prime Minister Benjamin Netanyahu, is scheduled to come in third with around 16 seats.
The projections mark a stunning reversal in particular for the conservative Likud Party that has controlled the Israeli government since Prime Minister Ariel Sharon trounced Labor's Ehud Barak in 2001.
But as Sharon moved to limit Israel's involvement in the occupied territories, removing all settlements from the Gaza Strip and shuttering several in the West Bank, right-wing members of his Likud Party rebelled.
In response, Sharon formed the Kadima Party and called new elections. But a sudden series of debilitating strokes left Sharon in a coma as of Jan. 4.
Fueled by an appeal to Israelis' feelings for Sharon, opinion polls have suggested that Kadima, now headed by interim Prime Minister Ehud Olmert, will run away with Tuesday's vote.
Its two guiding principles are the need to solidify Israel's permanent borders to preserve its character as a "Jewish and democratic" state, and, if necessary, to do so unilaterally in the absence of a Palestinian partner, a move Sharon took in Gaza when he felt that Palestinian leaders Yasser Arafat and current President Mahmoud Abbas did not act fast enough.
For Olmert, a 60-year-old lawyer, his transition from supporting actor to lead is the culmination of a long career as a lawmaker, mayor of Jerusalem, cabinet member and finally Sharon's vice premier and close confidant. Once an outspoken hawk who preached a greater Israel, Olmert underwent a startling conversion two years ago and decided Israel had to pull out of most of the areas captured in the 1967 Yom Kippur War. But it was a conversion mirrored by many in the Israeli public.
His decision to back Sharon's plan for a withdrawal meant abandoning his earlier idea of a greater Israel that included the Gaza and the West Bank settlements.
"It will lead to the loss of Israel as a Jewish state," he admitted to the Yediot Ahronot newspaper.
Although he will continue with plans to minimize Israel's involvement in the occupied territories, Olmert has said he plans to go ahead with his so called "E-1 development plan," which calls for building some 3,500 homes in the land between East Jerusalem and the large Maale Adumim settlement. Maale Adumim, about two miles from East Jerusalem, has more than 30,000 residents. This platform has been widely accepted by a majority of Israelis.
When it comes to relations with the Palestinians, Olmert has said that he will wait to see if the Hamas government meets the conditions for resuming Palestinian-Israeli contacts. These threshold conditions include recognition of Israel as a Jewish state, disarmament of all the Palestinian resistance factions, and adherence to all previous Palestinian Liberation Organization-Israeli agreements, including the 1993 Oslo Accords and the 2003 road map to peace.
The Oslo Accords call for the withdrawal of Israeli forces from parts of the Gaza Strip and West Bank and affirm the Palestinian right to self-government within those areas through the creation of the Palestinian Authority, while the 2003 road map was initially laid out by President Bush and called for an independent Palestinian state living side-by-side with an independent Israeli state.
Olmert has said Israel will determine its own eastern border by 2010 if the Palestinians do not return to the negotiating table. His separation line will likely run along a controversial West Bank barrier, which would include annexing around 10 percent of the current occupied Palestinian Authority. Under the Olmert plans, a future Israel would also include Maale Adumim, Ariel and Gush Etzion settlements as well as Jerusalem's Old City and the "adjacent neighborhoods" in occupied East Jerusalem.
Although a longshot in most polls, a victory by the Likud Party would represent a major shift in Israeli's efforts to settle the occupied territories question and would likely lead to a clash with the new Hamas government. Led by the former Prime Minister Benjamin Netanyahu, Likud has struggled to regain voter support in the wake of its opposition to the Gaza pullout.
But the party has outlined a clear agenda -- opposing further withdrawals from Israeli settlements, any negotiations with the Palestinians and any transfer of Israeli or international funds to the Palestinians. Netanyahu has also pledged to move the boundary wall of Israel eastward, deeper into the West Bank.
The rest of the nationalist right is divided between the NU-NRP and Avigdor Lieberman's Russian immigrant Yisrael Beinteinu Party. The NU-NRP's supporters are largely drawn from Israeli settlers who oppose any further civilian or military disengagement. The Yisrael Beinteinu Party advocates a controversial land trade policy where settlements are annexed to Israel in exchange for Palestinian areas in Israel. His ad campaigns have caused a jump in his polls and currently the party may be the sleeper candidate to win as many as 10 seats.
Also in the mix is the traditional Zionist left party, Labor. Amir Peretz, a working class activist of Moroccan descent who has a track record of promoting peace between the Palestinians and Israelis, raised the hopes for many Palestinians when he was elected to head Labor last November. But as the party has failed to gain traction in its campaign against Kadima and Likud, Peretz, according to political experts, has taken a harder line, saying his platform toward the Palestinians is one of recognition, disarmament and adherence. He also has promised never to "divide Jerusalem" or tolerate a right of return for the Palestinian refugees.
Instead of stressing the major issues of the occupied territories, Peretz has focused on social policies on the campaign trail, arguing for an increase in the minimum wage and "pensions for every citizen."
Labor's aim is to win at least 25 seats on Tuesday.
Israel's more than 1 million Muslim citizens are represented by three parties: the United Arab List, backed by the Islamist movement in Israel; the secularist Hadash coalition, supported by Israel's Communist Party; and the nationalist Al Balad movement, led by Azmi Bishara. All three advocate policies for political and civil equality as well as Palestinians receiving collective rights as a recognized national minority in Israel.
Arab parties are projected to win approximately eight seats. Ehud Olmert in the Kadima Party has stated that he opposes having any Arab minister in his cabinet, while Peretz has welcomed the idea of an Arab coalition.
Analysts are estimating that the only mystery will be the number of seats that the newcomer Kadima will win and whether some voters will change their minds at the last minute to support more veteran parties. Nonetheless, a win for Kadima will signify unilateral moves to the West Bank similar in style, if not scope, to the pullout of the Gaza in August and September of last year.