Benjamin Netanyahu has managed to cobble together a government dominated by nationalist and religious allies, setting the stage for conflict with the Palestinians and much of the world and leaving Israel angrily divided.

The coalition concluded this week has little desire for another round of peace talks with the Palestinians — or even going through the motions in order to pacify things, as has been done in the past.

Indeed, a key coalition partner — the Jewish Home party — favors increased settlement building in the West Bank, annexation of part of the territory and a version of perpetual military domination over the rest. Jewish Home will control ministries that can influence settlements, overhaul the relatively liberal judiciary and ramp up nationalism in Israeli classrooms.

Israelis didn't necessarily vote for this. Indeed, the Palestinian issue was largely left off the table during the election, mostly because the moderate opposition calculated that voters, disillusioned by years of failed peace efforts, were not interested and cannot easily be swayed.

In the fragmented system of proportional representation, small parties have long enjoyed outsize influence. In this case, the Jewish Home provided Netanyahu with the necessary cushion to secure a narrow parliamentary majority, giving it tremendous leverage in coalition talks.

The internal Israeli discourse is already boiling over with anger over domestic fissures unrelated to the Palestinian issue.

Many Israelis, even some Netanyahu voters, are outraged over his concessions to the ultra-Orthodox community, rolling back recent reforms aimed at enforcing the military draft on religious males and coaxing them into the workforce instead of a lifetime of studying religious texts at public expense. Israeli Arabs, with a fifth of the citizens, seem to be gearing up to demand a bigger say and shake off their underprivileged status. European-descended Jews are livid at Middle Eastern ones for voting en masse for Netanyahu, while the latter feel condescended to.

But the main question is what the world — especially the Americans — and the Palestinians will do. The government's term lasts more than four years, and the status quo with the Palestinians is extremely unlikely to survive that period.

Here's a look at where things might go:

WATCH WASHINGTON

Right now, the Obama administration needs to play nice with Israel as it pursues a nuclear deal with Iran, which is expected to be finalized next month. Israel has criticized the emerging deal and could work with its allies in Congress to hinder President Barack Obama's efforts.

In his first public reaction to the formation of the Israeli government, Obama congratulated Netanyahu, noted the close ties between the two allies and said he was looking forward to working with Israel on the Iranian nuclear issue.

But later this summer, the fundamental antipathy between Obama and Netanyahu could resurface. Obama's statement stressed "the importance of pursuing a two-state solution" with the Palestinians.

That could lead to many things: Obama could propose a peace plan in a bid to force Netanyahu's hand.

A less dramatic but perhaps more effective stick would be to support — or at least not veto — a European-sponsored resolution at the U.N. Security Council, perhaps recognizing a Palestinian state on the Palestinians' terms. France is already working on such a measure.

A third would be to coax the sides into another round of peace talks that would almost certainly be futile in every way except for one — buying time and putting off the outbreak of violence.

Or the United States could let the sides stew and see what comes.

THE PALESTINIANS WON'T WAIT

If the United States steps aside, the ball moves into the Palestinians' court.

Palestinian President Mahmoud Abbas opposes violence and has come out against any notion of another armed uprising. But he is 80 years old, has developed an authoritarian streak, and growing increasingly unpopular even in the West Bank.

Under the current arrangement, his Palestinian Authority continues security cooperation with the Israeli army. Israel continues to add settlers, many of them located deep in the territory in a way that appears designed to break up the area into easily controlled pieces.

Palestinian anger over the situation is so fierce that an uprising could potentially break out at any moment, though some Israeli experts consider it unlikely. Others expect Abbas to eventually hand Israel the keys and saddle it with a full — and more costly — occupation. And if Abbas is replaced, all bets are off.

For now, the Palestinians have swiftly condemned the new government. From Ramallah, Palestinian figure Saeb Erekat said it exposes "a new form of racist, discriminatory Israel." The rival Hamas Islamic militant group, which rules Gaza, termed it "radical and dangerous" and called on Arabs to isolate it.

THE PALESTINIANS' NUCLEAR OPTION

For a century, the political discourse has been dominated by talk of partitioning the country between Jewish and Arab states. In that sense, an Israeli pullout from the West Bank, with its millions of Arabs, would strengthen Israel demographically as a Jewish state. There are increasing voices among the Palestinians saying that they should stop playing along with a current policy that in the end does Israel a favor — and instead demand annexation and full rights in Israel.

Israelis will oppose this: An entity formed by Israel, the West Bank and Gaza would today be half-Arab and eventually almost certainly have an Arab majority. But due to Israeli settlement efforts that have made partition difficult, many in the world might back such a Palestinian demand.

A VICTORY THAT IS NOT ALL IT SEEMS

The Zionist left in Israel is these days primarily animated by its fear of such a "one-state solution" — and its leaders are growing increasingly exasperated by their inability to convince enough Israelis of the folly of supporting the right.

They face an uphill climb: Many of Netanyahu's supporters simply despise the left for cultural reasons — in many cases because they are somewhat traditional Jews whose families hail from the Arab world who feel slighted by the European-descended and secular elites who dominate the moderate camp.

Even so, Netanyahu's Likud party only won 30 of 120 seats. The "victory" amounted to an ability to draw support away from other nationalist parties. The addition of all the nationalist and religious allies to a coalition would have only brought Netanyahu to 57 seats, short of a majority in the 120-seat parliament.

So to rule he depends on a centrist party called Kulanu, which claims to be aligned with neither bloc and could bring the government down at any moment.

It is conceivable the opposition Zionist Union may join the coalition eventually. From the left wing opposition's view, the argument for such a move tends to focus on limiting the damage the right wing can inflict. It would also give party leader Isaac Herzog some needed relevance: his party has a history of replacing leaders who languish in opposition.

But new elections within a year or two are also more than possible, especially if convulsions follow with the Palestinians or in Israel's brittle relations with the world.

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Dan Perry is AP's Middle East editor leading text coverage in the region. Follow him on Twitter at www.twitter.com/perry_dan

Josef Federman is the Associated Press bureau chief in Jerusalem. Follow him on Twitter at www.twitter.com/joseffederman