JERUSALEM — Forced to rely on the support of two fast-rising rivals in his new governing coalition, Prime Minister Benjamin Netanyahu now faces a reshaped and rocky landscape that could spell trouble ahead: An unwanted culture war with the country's ultra-Orthodox minority as well as pressure to make peace overtures to the Palestinians.
After weeks of difficult negotiations, Netanyahu, who barely hung onto his job, was forced to cede significant power to his new partners, liberal former TV anchorman Yair Lapid and his unlikely ally, pro-settlement hard-liner Naftali Bennett.
Both men make no secret that they want to be prime minister one day, and each can bring down the government at will.
This new constellation is expected to force the cautious Netanyahu, who presided over a broad and stable coalition during his previous four-year term, to confront some of the nation's most contentious issues.
Both Lapid and Bennett have vowed to end years of preferential treatment for the country's small but politically powerful ultra-Orthodox minority. Lapid and the junior partner in the coalition, former Foreign Minister Tzipi Livni, will also put heavy pressure on Netanyahu to take a softer line toward the Palestinians. With President Barack Obama visiting next week, Netanyahu could be forced sooner than later to make difficult decisions about the Palestinians.
"The next term will be one of the most challenging in the history of the state," Netanyahu said Thursday. "We are facing great security and diplomatic challenges."
The ultra-Orthodox minority makes up roughly 8 percent of the country's 8 million people. Because of Israel's coalition system, their political parties have traditionally wielded power far beyond their numbers by guaranteeing a string of prime ministers a parliamentary majority.
Ultra-Orthodox political parties have used their kingmaker status to secure vast budgets for their religious schools and seminaries and to win automatic exemptions from compulsory military service for tens of thousands of young men to pursue religious studies. Older men collect welfare stipends while continuing to study full time.
The system has led to high rates of unemployment in the ultra-Orthodox community, and has bred widespread resentment among the general public. Attempts by ultra-Orthodox activists to impose their customs on broader society, such as pushing for gender-segregated buses, have further angered the public.
Both Lapid and Bennett tapped into this resentment to make great gains in the Jan. 22 election, promising to bring a "sharing of the burden" of military service and paying taxes. Lapid's Yesh Atid Party, running in its first election, emerged as the second-largest faction in parliament, with 19 of 120 seats. Bennett's rejuvenated Jewish Home captured 12 seats.
Netanyahu's Likud-Yisrael Beitenu bloc won 31 seats. Although it's the largest single faction, it is well below its 42-seat level in the previous parliament and far short of the 61 seats needed for a majority. With Lapid, Bennett and Livni's dovish "Movement" on board, Netanyahu controls a 68-seat majority.
Tough negotiations lasted nearly six weeks before it was finalized Friday, just a day ahead of a deadline that could have triggered new elections.
"Indeed, the new government is not what its leader had hoped for. He did everything he could to flee it, as if from a place plagued by boils, locusts, lice and pestilence. These were not the partners he had hoped for: He did his utmost to keep them out of the coalition, and they taught him a thing or two," wrote Yossi Verter in the liberal Haaretz daily.
"He is the Old Guard, they are the new. He, poor guy, will soon be history," he wrote.
In a sign of how tense the talks were, the negotiating teams decided not to hold a formal ceremony to sign the agreements, Yuval Karni reported in the more mainstream Yediot Ahronot paper. It was decided that the agreements would be signed by fax, so that the representatives of the parties would not even see each other at a signing ceremony.
The weeks of negotiations illustrated Netanyahu's limited room for maneuvering, and the significant leverage his partners will wield.
Forming a joint front, Lapid and Bennett forced the prime minister to keep the ultra-Orthodox parties, his traditional ally, out of the coalition. It is only the second time in the past 35 years that they have been in the opposition.
Lapid, a critic of excessive government spending, also forced Netanyahu to scale back the size of the Cabinet. The move had the added effect of infuriating members of Netanyahu's Likud Party by reducing the number of available Cabinet posts.
In a statement Thursday, Yesh Atid said its first order of business would be to submit a bill on reforming the draft system. It also said it would require all schools to teach a "core curriculum" that includes math, science and English. Ultra-Orthodox schools have frequently neglected these areas. The statement also promised "extensive economic steps" to integrate the ultra-Orthodox into the work force.
Lapid's party will control the finance and education ministries, giving him significant influence over budget and school policies. But taking away benefits from the ultra-Orthodox will not be easy. Netanyahu will be reluctant to take on his traditional allies, knowing he could rely on them again in the future.
The ultra-Orthodox, who have been able to mobilize tens of thousands of people into the streets, are already promising to put up a fight. "Our first mission is to topple this government," Arieh Deri, leader of the ultra-Orthodox Shas party, told Israel's Army Radio station.
Dealing with the Palestinian issue will be no easier. Netanyahu's own Likud Party is dominated by hard-liners who oppose significant concessions to the Palestinians, while Bennett, a former head of the West Bank settler movement, takes an even tougher line, calling on Israel to annex large chunks of West Bank territory that would have to be part of any future Palestinian state. He is sure to use his control over the Housing Ministry to try to build more settlement homes.
On the other hand, Lapid announced Thursday that the new coalition agreement promised a commitment to returning to the negotiating table with the Palestinians. Livni, who is to be Netanyahu's chief negotiator, ran for office on a platform devoted to reaching peace.
Netanyahu will be hard-pressed to balance these conflicting forces, yet there are some reasons for optimism.
After presiding over four years of deadlock and international isolation over the issue, Netanyahu has signaled he is eager to restart negotiations under his new government.
The Palestinians demand all of the West Bank, east Jerusalem and Gaza Strip — areas captured by Israel in the 1967 Mideast war — for a future state. They have demanded a freeze in settlement construction and a commitment to make Israel's 1967 lines the basis for a future border.
Saeb Erekat, the chief Palestinian negotiator, said the Palestinians would have "no problem" talking to Lapid or Livni.
"But if we want to negotiate with the Israelis, the government should accept the two-state solution based on the 1967 borders and implement its obligations like the settlement freeze" he said.
The arrival of Obama next Wednesday could raise pressure on Netanyahu to float some new ideas for restarting talks. Though Obama is not bringing any bold peace plan, he will be meeting separately with both sides in order to lay the groundwork for future talks.
"Netanyahu is going to have Obama visiting next week in Jerusalem and therefore he had to have a more moderate, at least by outlook, government," said Gayil Talshir, a political scientist at Hebrew University. "So the government in terms of Livni getting to be a minister in this government and Lapid being more moderate, it's definitely more moderate when you look at it from the outside."