One Israel leader Ehud Barak acknowledges victory last night at a rally in Beersheba. ( Reuters )

JERUSALEM (May 18) - One Israel's Ehud Barak trounced Prime Minister Binyamin Netanyahu last night, according to Channel 1 and Channel 2 exit polls, leading Netanyahu to concede defeat and tell stunned supporters that he is withdrawing from politics.

US President Bill Clinton immediately offered his "warmest congratulations" to Barak. Clinton said in a statement that he had spoken by telephone to Barak, as well as to Netanyahu, and he pledged to work "energetically for a just, lasting, and comprehensive peace that strengthens Israel's security."

The Channel 1 poll showed Barak beating Netanyahu by 17 percent, 58.5% to 41.5%, while Channel 2 put his margin of victory at 14% - 57% to 43%. The 57-year-old Barak will be the country's sixth prime minister in the last 18 years.

"I want to congratulate Ehud Barak on his victory in the elections," Netanyahu said at a ballroom in the Tel Aviv Hilton, flanked by his wife, Sara, and Foreign Minister Ariel Sharon. "The nation decided, and we honor its will - that is the way it needs to be in a democracy." After thanking his supporters, and saying he is proud of his accomplishments, Netanyahu dropped his political bombshell.

"Now the time has come to calm things down, to heal the rifts," he said. "I also think the time has come to say something else." Netanyahu continued: "For nearly 20 years, I have worked in public service, for the State of Israel, from the time when I was a consul in Washington and ambassador to the United Nations. I have much more to contribute to our country, but I think now the time has come to take a time out, to be with my wife and small children and decide on my future path. I announce here my intention to resign from the leadership of the Likud," he said to chants of "Haida Bibi." By 2 a.m., Barak had not yet addressed his supporters. He did, however receive a congratulatory call from Netanyahu, and said afterward that, on a personal level, the two men have had honest communication between them.

The other big victor, according to the exit polls, was Shas leader Aryeh Deri, whose party, according to Channel 1, won 15 seats, an increase of five seats from the outgoing Knesset. Deri, speaking to jubilant supporters at his Jerusalem headquarters, called for national healing.

"The people of Israel have suffered from horrible polarization over the last two months, from hatred, accusations, arguments. I think this people needs unity and love," he said to chants of "he is innocent, he is innocent." "That is the main message that the victor needs to transmit, a message of love and unity, not polarization and hatred," Deri said.

In addition to Barak's victory, One Israel easily outdistanced all the other parties in the Knesset race, garnering, according to Channel 1, 33 of the 120 Knesset seats, one less then the number of seats it won in the outgoing Knesset.

The Likud, however, suffered its worse showing since the party's predecessor, Herut, won 17 seats in 1961. According to Channel 1, the Likud will have only 18 seats in the next Knesset. (Channel 2 gave One Israel 29 seats, and the Likud 19.) Another big victor in the Knesset race was Tommy Lapid's Shinui, which - according to both exit polls - garnered six seats. The big losers in the Knesset race were Tsomet and the Third Way, which both failed to make it over the 1.5% threshold.

While the Third Way and Tsomet will be leaving the Knesset, a number of parties will be making a maiden appearance. According to Channel 1, the Center Party won five seats, Amir Peretz's Am Ehad, three; the National Union, three; Pnina Rosenblum, two; and Avigdor Lieberman's Yisrael Beiteinu, two. The 15th Knesset, if the exit polls hold, will have the most parties ever voted in at the beginning of a Knesset term: 16.

According to the Channel 1 poll, Meretz gained one seat, from nine to 10, the National Religious Party dropped from nine seats to five, Yisrael Ba'aliya dropped from seven to six, and United Torah Judaism kept its strength at four seats. Among the Arab parties, Hadash dropped from five seats in the outgoing Knesset to three, the Democratic Arab party won three seats, and Balad won two.

While Deri hinted last night at interest in a national unity government, and One Israel MK Uzi Baram said that the party ruled out negotiations with Deri, but not with Shas, Lapid said he would not join a coalition with the haredi parties. "The condition that neither Shas nor Agudat Yisrael be in the coalition was our ticket, and I am not backing away from that now," Lapid said, discussing the various coalition options. He said he will ask for the Justice Ministry.

Meretz head Yossi Sarid also said he will under no circumstances join a coalition with Shas. "We will be the second biggest party in Barak's coalition, because Shas will not be in it, because I - and several others - will not sit with them," he told Israel Radio. "Without us it will be impossible," Sarid said of Barak's coalition options. "I think that, for the first time, an opportunity has been created to build a coalition without haredi extortion."

Center Party head Yitzhak Mordechai, whose withdrawal from the race on Sunday paved the way for a decision in the first round of voting, said he was "pleased" by the results.

"I called and congratulated the Prime Minister elect, Ehud Barak, and I am convinced that he will navigate the country on the basis of the goals in which I believe - trustworthy leadership, unity, a closing of the gaps, and progress in the peace process." Mordechai said that the Center Party, which garnered only five seats, "achieved most of the aims we set for ourselves.The party was established, and set for itself [the goal] to do everything to change the values and the central issues on the public agenda - honest and trustworthy leadership and behavior."

Finance Minister Meir Sheetrit immediately called for a national unity government, saying that what needs to be foremost in Barak's mind "is the future of the country, not the future of one camp or the other. I think it is the obligation of anyone who wins to create a unity government to ensure that the proper decisions will be made."

Palestinian Authority Chairman Yasser Arafat welcomed Barak's victory and said he hopes the change in leadership would help revive the stalled Middle East peace process.

"I respect the outcome of the Israeli elections and I congratulate Barak," Arafat told reporters. Asked if he believed peace efforts would now move forward, Arafat replied: "We hope so."

Hamas leader Sheik Ahmed Yassin, on the other hand, told Reuters the election was "another trick by Israeli politicians," adding, "It is not going to lead the Palestinians to anything."

According to election officials, 79% of the country's 4.3 million voters cast ballots yesterday.

Turnout in the Arab sector was a bit lower. Turnout was especially low in the Arab village of Baka al-Gharbiya , where a violent clan feud involving hundreds of people that erupted Saturday night, a feud that left two persons dead and four others injured, kept most of the residents inside their homes yesterday.

Shimon Peres was called to the town to mediate the feud, and convince the estimated 10,000 eligible voters there to come out and vote. A One Israel appeal to the Central Elections Committee to keep the polls there open past 10 p.m. was rejected.

A number of isolated incidents of voter fraud were reported throughout the day to the Central Elections Committee, with the police making a number of arrests - mostly in haredi neighborhoods - of people voting with identification cards that were not their own. In Jerusalem's Romema neighborhood, some 500 haredim reportedly attacked police, trying to arrest a man voting with a false ID.

The police dealt with nearly 450 election-related complaints around the country, ranging from illegal campaigning outside ballots, to using fake identities or tampering with ballots. Fifty-five suspects were detained for questioning and 11 people were arrested. Ten people, including a policeman, were injured in a number of incidents.

Throughout the day there were reports of long lines at polling places in haredi neighborhoods, where voting committee officials from left-wing parties carried out stringent identification checks, including requests to voters to take off hats and glasses to confirm their identities. Following complaints early in the day, the committee informed the officials at the polls not to "overdo" the identity checks.

There were also a number of incidents reported where voters showed up at their polling place, only to find that someone using their name had already voted in their place. In addition there were complaints that voting slips for various parties and candidates had disappeared from the polling places.