HAR HOMA, West Bank (Reuters/AFP) - Israeli Prime Minister Benjamin Netanyahu, trailing in opinion polls, used a strategic Jewish settlement he helped found as the backdrop on Monday for an election eve bid to win back right-wing votes.

A day before Israel's election, Mr Netanyahu pledged on Monday to build thousands of settler homes in Arab East Jerusalem to prevent any future concessions to the Palestinians. "We will continue to build in Jerusalem, we will add thousands of housing units, and in the face of all the (international) pressure, we will persist and continue to develop our eternal capital," he said on a whistlestop tour of the Har Homa settlement neighbourhood in annexed East Jerusalem just hours before campaigning was to formally close.

Mr Netanyahu vowed he would never allow the Palestinians to establish a capital in the city's eastern sector. "I won't let that happen. My friends and I in Likud will preserve the unity of Jerusalem," he said of his ruling right-wing party, vowing to prevent any future division of the city by building thousands of new settler homes.

"We will continue to build in Jerusalem, we will add thousands of housing units, and in the face of all the (international) pressure, we will persist and continue to develop our eternal capital," he added.

Israel seized Arab East Jerusalem in the 1967 Six-Day War and later annexed it in a move never recognised by the international community.The Jewish state refers to both halves of the city as its "united, undivided capital" and does not see construction in the eastern sector as settlement building. Successive Israeli leaders have vowed that Jerusalem will never again be divided - in war or peace.

Setting the tone for his three terms in office, Mr Netanyahu promoted the establishment of Har Homa in 1997, in defiance of deep-seated international opposition, after he was first elected prime minister.

The settlement is on a hilltop in a part of the occupied West Bank that Israel annexed, along with nearby East Jerusalem, after the 1967 Middle East war. Palestinians, who call the site Jabal Abu Ghneim, have long viewed Har Homa's construction as an attempt to tighten Israeli control around the holy city.

"I thought we had to protect the southern gateway to Jerusalem by building here," Mr Netanyahu said, with a construction site behind the podium as his backdrop. "There was huge objection, because this neighbourhood is in a location which prevents the Palestinian (territorial) contiguity."

His main challenger Isaac Herzog, leader of the Zionist Union, said on Facebook that "Israel will be stuck with Bibi" unless voters turned out on Tuesday for the centre-left alliance, which polls predict will take 24 to 26 seats in the 120-member Parliament, compared with 20 to 22 for Likud.

No single party has ever won an outright majority in the legislature, making coalitions the norm. Israel's president picks the political leader whom he believes has the best chance of forming a coalition to have a go first.

Faced with the projected Zionist Union lead, Mr Netanyahu has in the final days of the campaign ramped up appeals to disaffected supporters who have shifted their allegiance to smaller right-wing parties to "come home" to Likud. "The choice is symbolic: the Likud led by me, that will continue to stand firmly for (Israel's) vital interests, compared with a left-wing government... ready to accept any dictate," he said in his campaign speech.

Mr Avraham Diskin, a political scientist at Jerusalem's Hebrew University, said opinion polls showed the right-wing and left-wing blocs were both short of a governing majority.

That could make two centrist parties, Yesh Atid led by former TV chat show host Yair Lapid, and Kulanu, headed by former communications minister Moshe Kahlon, kingmakers in the frenetic coalition-building that will follow the vote.

"In all previous elections there were considerable differences between predictions and results," Mr Diskin said, estimating that between 10 per cent and 20 per cent of voters were still undecided.

With some 70 per cent of the electorate usually remaining loyal either to left- or right-wing parties, "it's enough for three to five percent to move from one bloc to another to... get a dramatic change in the future government of Israel", Mr Diskin said.

In an interview with Reuters on Monday, Mr Lapid said "the Netanyahu era is coming to an end", with the majority of Israelis seeking change. Yet despite having been fired by Mr Netanyahu as finance minister in December, he did not rule out working with him again.

Mr Netanyahu has focused much of his campaign on security issues, paying a contentious visit to Washington two weeks ago to warn against a potential nuclear deal with Iran.

But political commentators said Mr Netanyahu, who has raised eyebrows in Israel by alleging that foreign powers want to topple him, has underestimated voters' concerns about soaring housing and food prices and miscalculated when he called an early election in December.