Israel: 'We'll be back soon', says Netanyahu; vows to stay in politics

But the new government's inevitable weakness was highlighted by the razor-thin 60-59 vote of confidence in a combination of left-wing, centrist, right-wing, and Arab parties with little in common except a desire to oust Netanyahu.

Thousands of people gathered in Tel Aviv to celebrate the outcome, which came after four inconclusive elections in two years.

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Members of Netanyahu's government vacated their seats at the government table in the Knesset plenum immediately after the confidence vote, with Netanyahu departing the prime minister's chair.

Netanyahu, 71, in typically combative style, vowed shortly before his defeat that "if it's our destiny to be in the opposition, we'll do so with our heads high until we take down this bad government and return to lead the country our way".

Beloved as "King Bibi" by his right-wing supporters and condemned as the "crime minister" by his critics, Netanyahu has long been the dominant, and increasingly divisive, figure in Israeli politics.

The new government, formed after an inconclusive March 23 election, plans largely to avoid sweeping moves on hot-button international issues such as policy toward the Palestinians and to focus on domestic reforms.

Palestinians were unmoved by the change of administration, predicting that Bennett would pursue the same right-wing agenda as Netanyahu.

(With inputs from agencies)