Israel is a place of comebacks. Ten years ago, Israeli Prime Minister-designate Benjamin Netanyahu was consigned to the political wilderness when his first premiership ended in a crushing election defeat. Now his fortunes have been transformed and he is on the point of becoming prime minister once again.

Yet he may have mixed feelings about this prospect. President Shimon Peres has invited him to form Israel's next government, yet crucial elements of Netanyahu's political game plan have already turned to dust. He wanted to be the clear winner of this month's general election; instead he came second, with 27 seats, and the only reason for his probable accession to the premiership is that, taken as a whole, the Right-wing block of parties won an overall majority in the parliament, or Knesset.

Moreover, Netanyahu told every audience throughout the campaign that he wanted to lead a broad government, with key positions for his rivals in the centre of Israeli politics, notably Tzipi Livni from the Kadima party. This would have given him a wide base of support and, crucially, much easier relations with President Barack Obama's administration.

Instead, Livni has made it clear that she will not join any government that Netanyahu leads. She is in no mood to do her rival favours. Now Netanyahu has been left with a single, deeply unappealing option: to form a coalition consisting only of the hardest of the hard Right. Put simply, Israel now stands on the brink of having a government filled with the country's most uncompromising, intractable hard-liners.

Netanyahu and his Likud party would be the most moderate members of this cabinet. The Israeli administration that could emerge in the next few weeks will be pledged to keeping the Golan Heights, thereby squashing any chance of peace with Syria. It will also be devoted to making Occupied Jerusalem Israel's undivided capital, thus sabotaging any possible settlement with the Palestinians. In a gesture of moderation, Netanyahu has promised not to build any more Jewish colonies on the occupied West Bank, but nor will he dismantle any existing ones.

If such a government were formed, Obama's quest for peace in the Middle East would begin to look like a fool's errand. America's ambition to broker an Israeli-Palestinian settlement would not only face the opposition of Hamas, Syria and Iran. It would also collide with the intransigence of Israel's new leaders. There is a precedent for this.

During his last premiership, between 1996 and 1999, Netanyahu endured poisonous relations with the Clinton White House. Just how bad things were has only been revealed in the memoirs of the American officials who were directly involved.

Dennis Ross, who was President Bill Clinton's Middle East envoy, wrote in The Missing Peace that his boss would routinely "yell" at Israel's shifty and untrustworthy prime minister. Netanyahu managed to infuriate Clinton during their very first meeting in 1996, according to Aaron David Miller, the deputy envoy.

In his book, The Much Too Promised Land, Miller recalls how the Israeli premier opened the session with a long, tendentious lecture on the Arab-Israeli conflict, leading Clinton to ask: "Who does he think he is? Who's the superpower here?"

The memoirs of Joe Lockhart, who was the White House spokesman, offer a more succinct verdict on Netanyahu. The Israeli leader was a "liar and a cheat" and "one of the most obnoxious individuals".

When Netanyahu faced re-election in 1999, the Clinton White House made no secret of its desire to see him beaten. James Carville, who masterminded Clinton's two campaign victories, flew to Israel to work for Netanyahu's opponent, Ehud Barak of the Labour party. He duly won the contest.

All this will weigh heavily on Netanyahu as he contemplates his new premiership. In Israel, he is known as the country's most Americanised politician, educated at the Massachusetts Institute of Technology and a veteran of service in New York, where he made his name as Israel's ambassador to the United Nations. Above all, Netanyahu knows the folly of alienating Washington.

Netanyahu risks being caught between an American administration which may push him to compromise with the Palestinians and possibly the Syrians; and his Right-wing coalition partners who will topple him if he does.

There is another, lesser known force at work here. Netanyahu is greatly influenced by his father, a venerable historian and Zionist intellectual. Benzion Netanyahu, who turns 99 this year, still looks over his son's shoulder and urges him never to compromise on the dream of a Greater Israel, embracing all the land taken in the Six Day War of 1967.

Pity the younger Netanyahu, pulled towards a compromise by America and tugged in the direction of intransigence by his coalition allies and his revered father. The prospect of becoming prime minister can never have seemed so bitter.