Bue & White leader Benny Gantz appeared to accept defeat in Monday's election, telling supporters in Tel Aviv that he shard their pain of disappointment.
Exit polls and the slowly trickling final results appeared to put Likud ahead on 37 seats in Knesset and 59 to 60 seats for the right-wing bloc.
Blue & White were predicted to win between 32 and 34 seats and the center-left bloc was expected to have between 54 and 55 seats.
Neither bloc appeared to be over the 61 MK benchmark for forming a government.
Gantz told supporters that the current election cycle was one of the toughest in Israel's history and he shared their pain of defeat.
"I believe that when the final results come in, we will see that we continue to grow," he said at the party headquarters in Tel Aviv.
"I share with you the sense of pain and disappointment because this is not the result that will put Israel back on the right path."
But Blue & White MK Moshe Ya'alon was less circumspect, taking a shot at Benjamin Netanyahu's legal woes calling him "the accused" and saying he does not have the numbers in his right-wing bloc to form a government.
"Even after a nasty campaign of lies and going low - at this moment, the accused Netanyahu does not have the ability to form a government," Ya'alon, who previously served as the Likud leader's defense minister, wrote on Twitter.
"Blue and White was created to restore sanity to the country, to bring back the values with which we grew up and were educated in," he wrote.
"As such, we are united and determined to continue our path until we reach our goal, even if the road is long."