What you need to know:
- The President-elect has said he views Jewish communities in the occupied Palestinian territory as an obstacle to peace.
- Israeli officials are also concerned that Israel critics in the Democratic Party will have influence over Biden's administration, said Eytan Gilboa, political science professor at Israel's Bar-Ilan University.
Joe Biden's US election win marks a setback for Israeli premier Benjamin Netanyahu, a staunch ally of President Donald Trump -- but it could spur renewed engagement between Washington and the Palestinians, experts said.
Netanyahu called Trump Israel's strongest-ever ally in the White House, and the Republican advanced policies that delighted the Israeli prime minister's right-wing base.
Netanyahu congratulated Biden and vice president-elect Kamala Harris on Twitter Sunday, before thanking Trump for a raft of moves that, according to Netanyahu, advanced Israel's interests.
Trump unilaterally pulled out of the 2015 Iran nuclear deal -- an agreement between Tehran and world powers loathed by Netanyahu -- and recognised Jerusalem as Israel's "undivided" capital.
He also endorsed Israeli sovereignty over the Golan Heights -- which was seized from Syria -- and avoided criticising Jewish settlements in the occupied West Bank.
According to a pre-vote poll by the Israel Democracy Institute think-tank, 63 percent of Israelis wanted Trump to win a second term.
After the US result was announced, 28-year-old Israeli truck driver Shmuel Nemirovski told AFP that even though "Trump would have been better" he was comfortable with Biden because the president-elect does not appear "to have anything against Israel".
In fact, Biden's ties with Israel run deep and he has been a vocal supporter of the Jewish state for decades.
He visited Israel in 1973, just months after he was first elected to the Senate.
In a 2015 speech, while serving as Barack Obama's vice president, Biden said the United States was wedded to a "sacred promise to protect the homeland of the Jewish people".
During the 2012 vice-presidential debate, when Biden was facing criticism over the Obama administration's treatment of Israel from Republican Paul Ryan, Biden asserted that he and Netanyahu had "been friends for 39 years".
Netanyahu on Sunday praised Biden as "a great friend of Israel" with whom he has had "a long and warm personal relationship".
But Biden is expected to reverse much of Trump's record, notable on West Bank settlement construction.
The president-elect has said he views Jewish communities in the occupied Palestinian territory as an obstacle to peace.
Israel's former envoy to Washington Michael Oren told AFP that tensions will spike if Biden seeks to revive the Iran nuclear deal, a prospect he said had a "very high" likelihood.
"Netanyahu will be perceived as the person who failed to stop the Iran agreement -- in 2015 and in 2021," he said, referring to domestic perceptions of the Israeli premier.
Netanyahu, and much of Israel's security establishment, blasted the Iran deal for offering an arch-foe massive financial benefits while failing to eliminate the threat of a nuclear-armed Islamic republic.
Iran insists its nuclear programme is strictly for civilian purposes.
A Biden effort to restore the pact with Iran pact could also affect Trump-brokered normalisation deals between Israel the United Arab Emirates and Bahrain, said Eytan Gilboa, political science professor at Israel's Bar-Ilan University.
The UAE, Bahrain and especially Saudi Arabia -- Sunni Muslim led states -- are bitter rivals of Shiite majority Iran.
Experts have said that the normalisation deals as well as warming ties between Israel and Saudi Arabia under Trump were partly driven by a desire to forge a united front against Iran.
"The Iranians are going to say you cannot have it both ways: you cannot have negotiation with us, and at the same time help to expand the coalition that is basically against us," Gilboa said.
Israeli officials are also concerned that Israel critics in the Democratic Party will have influence over Biden's administration, Gilboa said.
Vermont Senator Bernie Sanders, tipped for a possible cabinet post, has called Netanyahu a "reactionary racist".
Israel has meanwhile accused two Democratic congresswomen, Rashida Tlaib and Ilhan Omar, of supporting the Boycott, Divestment and Sanctions movement against Israel over its treatment of the Palestinians.
According to Gilboa, "the progressive, radical branch of the Democratic party" is "anti-Israel" and gaining strength.
"We don't know yet how much influence they will have on policy making," he said.
Under Trump, relations between Washington and the Palestinian Authority collapsed.
Trump cut funding to the UN agency responsible for Palestinian refugees (UNRWA) and rejected the notion that Israeli-annexed east Jerusalem should serve as the capital of a future Palestinian state, among other dramatic policy shifts.
In a statement congratulating Biden and Harris, Palestinian president Mahmud Abbas urged the incoming administration "to enhance the Palestinian-American relations".
Abbas said he wanted to work with the new administration "to achieve freedom, independence, justice and dignity for (the Palestinian) people".
Experts agree that while a renewed Middle East peace push is unlikely to top Biden's immediate agenda, his administration will seek to restore America's traditional role as a broker in the Israeli-Palestinian conflict.
"It is likely that they will seek much more engagement" with the Palestinians, said Sarah Feuer of the Institute for National Security Studies in Tel Aviv.