Israel's new government will prioritise domestic socio-economic issues, Prime Minister Benjamin Netanyahu pledged on Wednesday, a day after he won a narrow election victory.

"We are waking up on the morning after the elections with a clear message from the public," said Netanyahu in a brief broadcast address in which he made no mention of such pressing diplomatic issues as the frozen peace talks with the Palestinians.

"The Israeli public wants me... to put together a government which will include three big changes internally: a greater sharing of the burden (of military service), affordable housing and changes in the system of government."

Netanyahu, whose rightwing Likud ran on a joint slate with the hardline nationalist Yisrael Beitenu of former foreign minister Avigdor Lieberman, won a narrow victory with 31 seats, and he has pledged to put together the "broadest possible government."

"I come from ongoing talks with my partner Lieberman. We agreed that in addition to a responsible security and diplomatic policy, we will focus the talks on putting together a government along these three principles," he said.

"We want to form a government which is as broad as possible which will bring about these changes for the people of Israel."

In his victory speech on Tuesday night, Netanyahu said the first challenge facing the new government would be "to prevent a nuclear Iran."

The government's other priorities would be largely internal: stabilising the economy, a more egalitarian military service, reducing the cost of living and seeking peace with the Palestinians, he said.