When our government enters into formal discussions with Washington, it will be obliged to make decisions that may set the tone for its long-term relationship with the new administration. President Barack Obama has yet to fully show his hand, but his policy of engaging with jihadists is likely to encourage efforts to pressure Israel into additional unilateral concessions to the Arabs that will need to be vigorously resisted.

Much will depend on our prime minister's ability to maximize the objectives we share in common and set aside the rhetoric and differences over inconsequential issues. This applies above all to the recent brouhaha over the two-state solution.

Most of us have mixed feelings about our new government. The bloated number of ministers is disgraceful. The cabinet includes a number of outstanding personalities, yet some of the most talented were displaced by mediocrities. And due to the leverage of the small parties, social and political reform has probably been relegated to the back burner.

The primary responsibility for this rests with Kadima leader Tzipi Livni, who placed her ambition above the good of the nation and left Binyamin Netanyahu no alternative to the excessive concessions demanded by the smaller parties.

Yet to his credit, Netanyahu has kept his cool and doggedly persevered to create a broader government, even at the cost of bringing on himself the wrath of his own party. Many opponents of the former government may have cringed when they became aware that Ehud Barak retained his position, but most nonetheless welcomed the inclusion of Labor, which will diminish the veto powers of the smaller parties. More importantly, with Barak on the Left balanced by Lieberman on the Right, the government will be able to demonstrate that it represents a national consensus.

ASIDE from the Americans, Netanyahu faces enormous obstacles. The international community regards his government as worse than rogue states like Iran, North Korea and Sudan. The Europeans behaved appallingly, employing unprecedented pressure to intimidate the government even before it was formed, while seeking to engage with Iran's proxy, Hamas.

Avigdor Lieberman would not have been my choice for foreign minister. Yet unless his legal problems intervene, he may surprise us. His language is blunt and undiplomatic - occasionally to the point of being crude - and he tends to polarize situations, but his intelligence and pragmatism should not be underestimated.

Lieberman's maiden speech, while lacking finesse, did contain some refreshing aspects. For the first time in many years, an Israeli leader told the truth instead of paying traditional lip service to the illusion of "peace in our time." He said that endless talk about peace achieves nothing, and that the best guarantee for peace is for the country to remain strong. He correctly noted that previous efforts to appease our adversaries and the international community only increased the downward spiral in our global standing and encouraged the PA to intensify its anti-Israeli incitement.

Lieberman dismissed Annapolis as a failure, provoking hysterical condemnation from the Left, which until then had been saying the same thing. He also made it clear that while the new government would scrupulously respect all prior international commitments, he rejected the vague Olmert agreements with the Palestinians, which were never brought to the Knesset for approval, and Livni's secret negotiations, which have yet to be revealed to the public.

In the light of this, it is bizarre that both Netanyahu and Lieberman remain stubbornly reluctant to utter the phrase "two-state solution." This merely provides ammunition to American liberals and others pressing Obama to adopt a negative European-style approach. After all, both adamantly insist that they intend to continue negotiations, seek to achieve a settlement, and have no desire to rule over Palestinians. Of course they demand reciprocity, insist that all parties adhere to their commitments and will not countenance the creation of any terrorist state that would endanger our existence.

Lieberman went even farther, undertaking to abide by the Quartet road map, which he defined as "a binding resolution" that "we will adhere to by the letter." This clearly presupposes that if and when the terror infrastructure is ever dismantled, the road map would culminate with a Palestinian state.

The evasive attitude concerning the two-state solution seems even more absurd because under current conditions a peaceful Palestinian state is virtually inconceivable. The Palestinians could have established a state years ago had their prime motive not been to end Jewish sovereignty. Our purported peace partner still adamantly refuses to accept us as a Jewish state, continues to promote anti-Semitic incitement, executes Arabs selling land to Jews and fails to prevent its military wing from launching terrorist attacks.

INSTEAD of becoming involved in provocative arguments over a two-state solution, we should be urging those who criticize the Netanyahu government to take account of the criminality and cult of martyrdom which to this day dominates Palestinian society, and should be insisting that it is high time that Mahmoud Abbas and his associates begin demonstrating a willingness to live side by side with a Jewish state.

Netanyahu is undoubtedly reading the disconcerting signals from Washington, and must be anticipating the major pressures he is likely to face from the White House. There are indications of a desire to bypass the road map, disregard ongoing terrorism and define the endgame first and even accept a Palestinian state incorporating Hamas. There is President Obama's engagement with the Iranians, which could backfire. There is his open endorsement of the Saudi peace plan, which calls for a return of Arab refugees and disregards our requirement for defensible borders. There are even concerns that the US may no longer be relied upon to employ its veto in the UN to protect us from biased resolutions. Clearly, in relation to most of these issues, Netanyahu will be obliged to stand firm and resist further unilateral concessions.

The only positive element in this worrying scenario is that Netanyahu understands the US and is better equipped to negotiate a realistic accommodation with Obama than any other Israeli politician. He can be relied upon to show flexibility, but unlike his predecessors will refuse to compromise the nation's basic security. Still, to retain credibility and be able to adopt an effective approach to the major issues confronting us, including the existential threat posed by a nuclear Iran, he must avoid needless confrontations or diversions into counterproductive debates over a currently inconceivable two-state solution.