In the outgoing parliament, Mr Netanyahu's Likud party, together with the ultra-nationalist Yisrael Beitenu, have 42 seats.
Yisrael Beitenu, as well as Shas and United Torah Judaism, are all likely to oppose it there.
ECONOMIST: The prime minister bows again to the religious right
His Likud-Yisrael Beitenu bloc won 31 seats in the 120-seat parliament, far short of the 61-seat majority he needs.
He heads the Yisrael Beitenu party, which ran on a list with Likud to win last month's elections narrowly.
It is almost certain that the prime minister's right-wing Likud-Yisrael Beitenu alliance will enjoy that privilege after Tuesday's vote.
Likud Beitenu, a coalition of the Likud and the Yisrael Beitenu parties, had 42 seats in the outgoing Knesset.
According to the polls, Yisrael Beitenu, previously a minor right-wing party led by Avigdor Lieberman, has been doing surprisingly well.
His Likud-Yisrael Beitenu party list will form a coalition with the centrist Yesh Atid and Hatnua and the far-right Jewish Home.
Likud and Yisrael Beitenu, which formed an alliance ahead of the vote, saw their position in the Knesset weakened by the vote.
Yisrael Beitenu's programme puts things in an even more straightforward way.
Yisrael Beitenu, another coalition partner, takes an even tougher line.
ECONOMIST: The prime minister bows again to the religious right
Mr Netanyahu is expected to act as foreign minister while Avigdor Lieberman, who leads his partner Yisrael Beitenu, faces charges of fraud and breach of trust in a trial.
Two especially sensitive components in Mr Netanyahu's political calculations are Avigdor Lieberman, the foreign minister and leader of the Yisrael Beitenu party, and Benny Begin, a minister without portfolio.
ECONOMIST: A few glimmers of hope amid the bickering and point-scoring
Already the prime minister faces a tough task just to quell the disquiet among members of his own Likud-Yisrael Beitenu alliance, which gave up key cabinet posts to Mr Lapid.
For Yisrael Beitenu to join Mr Netanyahu in a right-religious coalition in which its secular reforms would be stymied could well be seen as a painful betrayal by its voters.
Nor does he want to snub Israel's Russian immigrants who provided the bulk of the votes for Yisrael Beitenu, the rightist-secular party under Avigdor Lieberman, which came in third in the election.
Recent polls show that Netanyahu's approval numbers are falling while those of his two main rivals - Opposition leader Tzipi Livni and Foreign Minister and Yisrael Beitenu leader Avigdor Leiberman are rising.
This shift had been preceded in the late 1990s by the rise of two new parties: Shinui, an anti-clerical outfit founded by Tommy Lapid, and Yisrael Beitenu, a far-right party, backed mainly by Russian immigrants, led by Avigdor Lieberman.
He thinks Labour's presence will soothe international worries about his hardline pronouncements (he has said there will be no Palestinian state for now, no withdrawal from the Golan Heights, and no partition of Jerusalem) and especially about his alliance with Avigdor Lieberman's extreme nationalist Yisrael Beitenu party.
As proximity talks are set to begin, Mr Netanyahu is boxed in not just by Shas and his other hawkish coalition ally, Yisrael Beitenu, led by his foreign minister, Avigdor Lieberman, but also by his own Likud party's raucous right wing, which is against making any concessions to the Palestinians.
By making demands Netanyahu and his coalition partners cannot accept, Obama hopes to either bring down the government and replace Netanyahu and Likud with the far-leftist Tzipi Livni and Kadima, or force Yisrael Beitenu and Shas to bolt the coalition and compel Netanyahu to accept Livni as a co-prime minister.
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