JERUSALEM -- Israeli voters ended the 15-year reign of the conservative Likud bloc yesterday and gave Yitzhak Rabin the power to form a more liberal government.
The voters defied predictions of a close election in rejecting continuation of the government of Prime Minister Yitzhak Shamir. In dramatic numbers, they swung to the Labor Party of Mr. Rabin, who is virtually guaranteed to be the next prime minister.
Mr. Shamir, who inherited the mantle of Menachem Begin almost a decade ago, acknowledged that the defeat will end his long career. In a TV interview early today, the 76-year-old Likud leader said he was "at the end of the political road. . . . Even if we had won a total victory, I wouldn't have carried on much longer."
The power shift signals dramatic changes. It will give a boost to the moribund peace negotiations, put a crimp on Jewish settlements in Arab areas of the West Bank and Gaza Strip, speed Palestinian autonomy in those territories and improve U.S.-Israeli relations.
"We will change the national priorities," Mr. Rabin said in a speech to his supporters after exit polls pointed to his victory. "We will strive for a coalition that will express the central stream of the nation."
"There has been a turnabout in the state of Israel," crowed Chaim Ramon, one of the Labor Party's chief campaign architects. "We've dreamed about this moment for a long time."
With 85 percent of the ballots counted, Mr. Shamir's Likud bloc stood to lose seven of its 40 seats in the Knesset, Israel's parliament.
The Labor Party and the liberal Meretz bloc would gain nine seats to come within three of an absolute majority in the 120-seat Knesset.
Labor Party officials said they would start negotiations today to hammer out a governing coalition. The leftist parties will need an ally among the smaller religious or conservative parties to secure the necessary 61 seats. The final arrangements may take several weeks.
The election was a dramatic reflection of the discontent of Israeli voters, who have seen their economy stultified while their government tried to settle territories seized in the 1967 Six-Day War.
It also was a demonstration of the emerging strength of new immigrants from the former Soviet Union, who already make up about 10 percent of Israel's population. According to preliminary analyses, the majority of the immigrants voted for Labor.
But mostly it was an endorsement of the appeal of Mr. Rabin, a 70-year-old military hero. He urged the public to turn away from the government's ideological obsession with occupied territories and to recognize the reality that the West Bank and Gaza are Arab lands.
He persuaded voters that he could make concessions necessary to bring peace with Palestinians without endangering Israel's security. They gave him the authority to head a government that does not include Likud for the first time since 1977.
Mr. Shamir, who felt it his destiny and obligation to expand Israel from the Mediterranean Sea to the Jordan River, seemed to give up that mission reluctantly today.
In an extraordinary speech this morning, Mr. Shamir harked back to the early days of the Jewish struggle, when he was a branded terrorist and had to move about in the disguise of a rabbi because of his work in the underground. He urged his supporters not to abandon that same fervor.
"It doesn't matter how others behave. We will be etched for eternity in the history of the Jewish people," said Mr. Shamir. The usually reserved prime minister was visibly choked with emotion, his hands and voice shaking.
He reiterated his belief that his hard-line stands against the Arabs and in favor of Jewish settlements were necessary for the "existence of the Jewish people."
In the campaign, the incumbent prime minister vowed he would make no concessions to Arabs in the peace process and continue the strong-armed suppression of the Palestinian uprising.
His candidacy was hampered by a sluggish economy, rising unemployment, a slowdown in immigration from the former Soviet Union and charges that his administration was rife with corruption.
"This is a vote of no confidence in the existing party," said Shimon Shitrit, a Labor member of the Knesset. "It's a no confidence vote on their moral standards, their corruption, their failure to meet the historical challenges of absorption" of immigrants.
Mr. Shamir acknowledged that he will be replaced as the Likud prepares to become an opposition party. "There are no successors," he said, in his televised interview. "We are a democratic movement. When I go, the movement will gather and decide on my replacement."
A change of government is expected to improve U.S.-Israeli relations. Although the United States has scrupulously avoided commenting on the Israeli campaign, the Bush administration is widely believed to be pleased to see the end of Mr. Shamir's term.
His stubborn insistence on building settlements in the occupied territories ran contrary to U.S. policy. Over that issue, the administration blocked the guarantee of $10 billion in loans sought by Israel.
Shoshana Cardin, chairman of the Conference of Presidents of Major American Jewish Organizations, said in Jerusalem last night that the issue of loan guarantees was likely to be revived.
"Before we came out here, there were two understandings we received from the U.S. administration," the Jewish leader from Baltimore said. "Whoever is the prime minister is to be invited to meet with the president this summer, and the issue of loan guarantees is not dead. Those are commitments."
The bloc of Knesset seats won by Labor could significantly reduce the influence of religious parties on Israel's government. In the past, most governments have had to depend on the small ultra-Orthodox parties to gain a ruling majority.
"The Israeli population for quite some time has been much more moderate than its government," said Ehud Sprinzak, a professor of political science at Hebrew University.
"There's no question the biggest loser of tonight's elections are the ultra-Orthodox religious parties," he said. "They are no longer going to be the pivot of forming coalitions."