With champagne and harmonica music, Israeli pensioners celebrated their new party's surprise election showing - until their 79-year-old leader said it was time to go to bed.

In a shock to Israel's long-dominant establishment parties, voters in the election put Gil, which stands for "Pensioners for You," the far-right Yisrael Beitenu and other little-known groups on the political map.

Political analysts attributed the shift to growing public disaffection with the major parties and low voter turnout.

"No doubt the Likud has suffered a tough blow," said former Prime Minister Benjamin Netanyahu, whose right-wing party that dominated Israel for decades was projected to get only about 12 seats in the 120-member parliament.

Mr Netanyahu said he did the best he could with a party left devastated by Prime Minister Ariel Sharon's decision to bolt Likud to form centrist Kadima.

Supporters chanted "Ehud, Ehud" after Mr Olmert declared victory, then headed off home.

"He (Sharon) probably would have said we could have done better, but let's get to work," said one Olmert aide.

In a first for a party championing the rights of the elderly, Gil was tipped by exit polls to take eight to 10 seats in parliament and has big plans for the future.

"We may join a coalition government led by Kadima, if our needs, such as medical cost reductions and guaranteed pensions, are met," said Hefseiva Ben-Nun, a 66-year-old former teacher and Gil party leader. The most successful of the surprise winners on the night appeared to be Moldovan-born ultranationalist Avigdor Lieberman.

His Yisrael Beitenu was projected to take 13 to 14 seats, putting it ahead of Likud. Mr Lieberman's campaign was especially popular among Russian speakers, employing catchy slogans like: Olmert: Nyet, Netanyahu: Nyet, Lieberman: Da.

David Iosphe, who moved to Israel from Ukraine in 1978, said he liked Lieberman's straight talk and dismissed Mr Netanyahu and Mr Olmert as "career politicians".

"Mr Lieberman is the only person who knows what our country needs," the 68-year-old said at Yisrael Beitenu's post-election party in Jerusalem.

The mood was sombre at Likud's headquarters. Party members milled about inside a giant convention centre with only a few dozen supporters on hand.

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