It has been a tough few months for Israel's diplomatic corps. At the start of the year, diplomats were fending off accusations that Israel was using excessive force in its offensive against the Hamas-controlled Gaza Strip. After that conflict they faced a torrent of allegations that their actions had amounted to war crimes, claims that they deny.

Just when diplomats thought things could not get worse, Avigdor Lieberman arrived to take the helm at the foreign ministry. The leader of the far-right Yisrael Beiteinu party made clear he has no intention of treading softly. Taking the stage this month at the handover ceremony in Jerusalem, he delivered a scathing critique of the previous government's efforts to strike a peace deal with the Palestinians to create an independent state.

Although the two-state solution dominates diplomacy to resolve the ArabIsraeli conflict, now more than 60 years old, Mr Lieberman asked: "Does anyone think that concessions and constantly saying, 'I am prepared to concede', and using the word 'peace' will lead to anything? No, that will just invite pressure and more and more wars." Officials and diplomats were shocked. "We all felt that we are in for one hell of a ride," says one official present. Mr Lieberman "was effectively saying: 'I am exactly the guy you thought I was.' "

The new minister's comments dispelled any doubt that the world was facing a new political reality in Israel. True, the previous government, led by Ehud Olmert, had waged two wars since 2006 - one in Lebanon as well as that in Gaza. But it had also earned goodwill abroad because its stated policy was the creation of a Palestinian state, which it said was crucial to Israel's long-term future. By contrast, the new government views territorial concessions as a dangerous aberration.

Benjamin Netanyahu, prime minister, has so far explicitly refused to endorse a two-state solution. He favours instead an "economic peace" that would improve the living standards of Palestinians without delivering an independent state.

But Israel and its government, too, face a new reality. Under George W. Bush it had enjoyed an unflinchingly supportive White House. While no one expects President Barack Obama's administration to embark immediately on a collision course with Israel, many officials and analysts predict that there will be tensions.

For Israel, the new reality in Washington comes at a time when the Gaza war and its aftermath have stoked widespread public condemnation, damaging the Jewish state's international standing and straining relations with friendly Arab countries such as Egypt and Jordan as well as with Turkey, a vital ally.

The backlash has practical consequences: after an aggressive international legal campaign to prosecute Israelis for alleged war crimes, countries such as Spain and Britain have become dangerous territory for some officials and soldiers involved in the conflict. Businesses warned last month that the increasingly hostile attitude to their country was hurting exports.

While most analysts agree that Israel is not, at this stage, an international outcast, the question of how the new government will deal with the backlash - and how the backlash will affect policymaking and diplomacy in the years ahead - is both real and urgent. A European diplomat predicts that if Mr Netanyahu and Mr Lieberman refuse to back the two-state solution then, at least in Europe, "we won't be able to conduct business as usual with them".

Daniel Levy, director of the Middle East task force at the New America Foundation in Washington, says of the decline in Israel's reputation: "Part of this is a structurally inbuilt logic of an occupation that becomes increasingly aggressive, in order to maintain itself and a settler population that is increasingly radicalised.

"Both of these lead Israel to take harsher measures and in turn Israeli society becomes less humane and liberal; and in order to justify itself, it becomes ever more immune to international criticism."

Far from persuading the country to re-examine its policies, such criticism is having the opposite effect. "There is a campaign to delegitimise us but we're a democracy and we have major strategic allies," says Danny Ayalon, the new deputy foreign minister.

On the streets of West Jerusalem, there is already a backlash against the backlash. Israelis say they are being singled out unfairly, with some claiming recent hostility is nothing more than thinly disguised antisemitism. Analysts meanwhile predict that though the army might be more careful in the next round of fighting, whether in Gaza or elsewhere, criticism from abroad will never deter it from fighting what it insists are just wars.

"No one likes to be described as cruel and as a violator of human rights. But the question is: what are the implications? Certainly, there will be constraints on a decision to repeat the operation in Gaza - but it will not be a strong constraint," says retired general Shlomo Brom,senior analyst at Israel's Institute for National Security Studies.

At this stage, the biggest and most obvious flashpoints in Israeli relations with the outside world will involve the Middle East peace process. Mr Netanyahu is using the word peace and has promised to continue talks with the Palestinian Authority, although without saying what they will be about. The question is whether the discussions will include the "final status" issues, including the borders of a Palestinian state and the fate of Arab east Jerusalem, which Palestinians want as their capital.

To reduce pressure for a deal with Palestinians, analysts say, Mr Netanyahu might want to engage Syria in talks. Israel's defence and security establishment has long favoured an agreement that would hand the occupied Golan Heights back to Damascus in return for peace, arguing that this would weaken Iran's influence in the region. Syria is a close ally of Iran and the two states are the main backers of anti-Israeli Palestinian and Lebanese armed groups.

But any movement on Syria will face strong opposition, not least from Mr Netanyahu's coalition allies, including Mr Lieberman, who vowed when he took office that there would be no withdrawal from the Golan. "I think what Mr Netanyahu would like to do is focus on the economy and on security, and not do anything that is connected to the Palestinians or Syria," says Mr Brom.

If that turns out to be the government's approach to regional diplomacy, Mr Netanyahu and Mr Lieberman may find they will pay the price elsewhere: in the occupied West Bank, where Jewish settlements continue to expand in violation of international law and in defiance of criticism from abroad. The previous Israeli government managed to fend off pressure to crack down on settlements - or at least to halt their expansion - largely by pointing to its efforts with the Palestinian Authority. Mr Olmert argued repeatedly that there was no point expending political capital on fighting the powerful settlers' lobby at a time when he was working towards a comprehensive peace deal.

Mr Netanyahu will not have this excuse. As one western diplomat says, "I think this government will not get away with things that the previous government did get away with."

T he government is subject to contradictory political forces both at home and abroad. Mr Netanyahu is locked into a hard-right coalition opposed to ceding territory and uprooting settlers. His own misgivings aside, he would risk blowing apart his cabinet if he were to undertake a serious peacemaking effort. At the same time, he must avoid a rift with the US - both for the sake of his broader goal of containing Iran and for the purpose of political survival.

"If he doesn't [pursue] a serious Syria [diplomatic] track and he doesn't hold the fort on the West Bank, he is in serious trouble," says Yossi Alpher, a security analyst and former adviser to Ehud Barak, the defence minister. "The Israeli public wants its prime minister to be persona grata in Washington."

Much depends on the Obama administration. In political and strategic terms, probably only the US has the leverage to force a rethink of Israeli policy. But will Mr Obama and Hillary Clinton, his secretary of state, be willing to confront America's most crucial ally in the Middle East?

Mr Obama has already signalled a shift of emphasis in relations with Israel by appointing George Mitchell as his Middle East envoy. An experienced troubleshooter and mediator, he has few friends on the Israeli right, which remembers the tough language on settlements in his 2001 report.

Mr Mitchell is due in Israel today for his first meetings with the new government, closely watched by Palestinians and Arabs. Mr Obama, however, has already set the tone of what he would like to see emerge from the talks. "Let me be clear. The US strongly supports the goal of two states, Israel and Palestine, living side by side in peace and security," the president said in his speech in Turkey this month. "That is a goal that I will actively pursue as president."

As a seasoned, astute politician, Mr Netanyahu is expert at navigating Washington's political circles, so may find a way of limiting American pressure. Moreover, Israel can count on support in Congress.

"It will be necessary for the new prime minister and the US to create an understanding where steps will be taken and negotiations will proceed - what negotiations is not clear but the economic aspect will be given strong priority," says Ephraim Halevy, the former head of Israel's Mossad security service who worked closely with Mr Netanyahu in the 1990s.

Mr Mitchell's trip could give the first signs of where Washington wants to go. "The US has not yet played its hand," says one western diplomat.