Benjamin Netanyahu will be sworn in as Israel’s prime minister, marking a decisive shift to a more rightwing, hawkish government, just as the country is facing mounting international criticism.

The Likud party leader, prime minister between 1996 and 1999, will preside over a broad but potentially fractious coalition. Mr Netanyahu’s alliance includes the far-right Yisrael Beiteinu party, the centre-left Labour party and the ultra-orthodox religious Shas group. His government may eventually comprise six parties with strongly diverging policies on issues from foreign policy to Israel’s religious-secular divide.

The new prime minister faces discontent within his own party over the number of senior cabinet posts for his party affiliates.

In a speech on Monday, Mr Netanyahu signalled a readiness to pursue peace agreements with Israel’s neighbours, stressing “whenever Israel stands before a peace-seeking Arab leader, it follows and answers the call”.

His statement formed part of a broader effort by Mr Netanyahu and other leading Israeli politicians to counter international concern about the new government, which is seen as markedly less enthusiastic about a peace deal with the Palestinians than its predecessor.

Mr Netanyahu has so far refused to back the idea of an independent Palestinian state – the cornerstone of all recent diplomatic efforts to end the 60-year Israeli-Palestinian conflict.

Compounding the difficult international environment faced by the new government is the backlash over Israel’s recent assault on the Gaza Strip, which has sparked calls for a war crimes tribunal and strained relations with neighbouring Egypt. The Arab world, in particular, has been aghast at the appointment of Avigdor Lieberman as Israel’s foreign minister.

Mr Lieberman, leader of Yisrael Beiteinu, is known for anti-Arab outbursts, and an election campaign this year that targeted Israel’s Palestinian minority. However, fears that Mr Netanyahu could become dependent on Mr Lieberman and other far-right groups have receded since last week, when he managed to bring the Labour party on board. The coalition agreement will allow Ehud Barak, the Labour leader and a former prime minister himself, to continue in his job as defence minister

It is unclear, however, to what degree Labour will be in a position to counterbalance the rightwing forces in the coalition. The party only controls five out of 30 cabinet posts and will have fewer deputies than either Likud or Yisrael Beiteinu.

The decision to join a government dominated by rightwing and religious parties is likely to have antagonised many Labour voters, potentially reducing Mr Barak’s readiness to force an early election over policy disagreements.