Yair Lapid, the party's No. 2 figure, told a press conference Wednesday that though his party "did not win in this round, I respect the voters".
Both Netanyahu and Gantz declared victory in the tightly contested election on Tuesday, with both camps claiming their win was "clear" - but the right-wing bloc managed to achieve the minimum 60 seats required to form a coalition in the Knesset, the 120-seat Israeli parliament.
"It is a night of colossal victory", Mr Netanyahu, 69, told cheering supporters in a late-night speech at Likud headquarters.
- The 59-year-old Gantz touts his military service and accuses Netanyahu of being corrupt and sowing division, but the two hold similar views on security issues and Israel's approach to the Palestinians.
Israel's incumbent Prime Minister Benjamin Netanyahu is on course for a record fifth term, election results show.
He faced a tough challenge from Gantz, who offered the security credentials prized by Israelis and a clean-hands image, but lacked the political experience the prime minister accrued in a combined 13 years in office. Exit polls all projected the iconic Labor party, which ruled the country for its first 30 years, tumbling to single digits in the parliament.
Their support would put Netanyahu over the 61 needed for a majority.
On election day itself, Netanyahu went to a beach near the coastal city of Tel Aviv, urging sunbathers to get out of the water and save him at the ballot box - posting a video of his appeal on Twitter. But with at least 97 percent of the votes counted, Netanyahu appears to be in the best position to form a government because of the strength of other right-wing, nationalist and religious parties.
The vote had always been expected to be close, even with Netanyahu facing potential corruption charges.
He engaged in populist rhetoric that critics said amounted to the demonisation of Arab Israelis and others. Israel's central elections commission banned parties from bringing cameras into polling stations after Likud party activists were caught with hidden cameras in Arab towns.
Gantz called Netanyahu's pledge "irresponsible".
But Netanyahu also faces an ongoing criminal investigation.
- The attorney general however has announced his intention to charge Netanyahu with bribery, fraud and breach of trust pending a hearing, with proceedings set to begin in the coming months.
Hanan Ashrawi, a senior Palestinian official, said Israel chose to entrench "the status quo of oppression, occupation, annexation and dispossession".
Saeb Erekat, the chief Palestinian negotiator and secretary general of the Palestine Liberation Organisation, called the results a "clear-cut vote" to maintain a situation where there are no peace talks and the Israeli government is making unilateral moves to change the situation on the ground with the help of the United States administration of President Donald Trump.
"All that we hope is there will be a just way, a correct way to reach peace", he said.
The last round of USA -brokered peace talks between Israel and the Palestinians collapsed in 2014. "They don't want a power sharing arrangement", Barak said.
This will be an unofficial consultation to create a proposed resolution on how to act in the face of a lack of any practical options for dealing with a future Israeli government resolution to annex territories in the West Bank. However, Abbas stubbornly refused, and he continues to boycott the Trump administration.