If re-elected on Tuesday, Netanyahu will face a critical decision that will define his term.

He can form a majority coalition with the hard-line and religious parties he often calls his natural partners – or reach across the aisle and try to bring centrist parties into a broader-based government that might be more amenable to pursuing peace and ending, at least partly, the occupation of the West Bank and other territories.

His decision will have deep implications.

A narrow coalition of parties that oppose concessions to the Palestinians, while the easier option, would mean continued deadlock in Mideast peace efforts and increased confrontation with the international community, including Israel’s key ally, the United States.

A broad coalition could force Netanyahu to give powerful Cabinet posts to more moderate figures as the price of their support, and would likely draw fierce opposition from within his own Likud Party.

In either case, the odds for a breakthrough in peace talks appear faint at best, because no Netanyahu-led coalition is likely to offer the Palestinians better peace terms than those they already have received and either rejected or ignored under previous governments. Netanyahu’s own positions fall far short of anything acceptable to the Palestinians.

Likud officials refuse to say which way they are leaning. Netanyahu’s campaign chairman, Cabinet Minister Gideon Saar, said Thursday that the party hasn’t even started thinking about building the coalition.

“This would send the wrong message that we’ve already won,” Saar told an interviewer on Channel 2 TV. He said the party is focused on capturing as many seats in Israel’s fragmented Knesset, or parliament, as possible.

Under Israel’s system, parties win a number of seats based on the percentage of votes they receive. No party has ever won an outright majority in the 120-seat parliament. The leader of the party with the best chance of cobbling together a majority is tapped as prime minister and gets the first chance to form a coalition.

All the polls show that Netanyahu’s Likud Party – in alliance with the more nationalist Israel Beitenu party – will win more than a quarter of the seats, and together with other rightist and religious parties should command at least a narrow overall majority. Although that can still change, the operating assumption in Israel is that Netanyahu will indeed emerge with a majority.

In part, this is because the opposition center-left bloc of parties has failed to rally behind a single dominant leader.

The conflict with the Palestinians and the fate of occupied territories, hotly debated in Israel for decades, has barely registered as a campaign issue.

Many left-leaning parties – including the Labor Party, which traditionally has led the bloc – have focused on internal economic issues or stressed the personalities of their leaders. This reflects the sense that Israelis have given up hopes of reaching a peace deal with the Palestinians, and stressing other issues is the best way of attracting support.

It has proven difficult, because among the current crop of party leaders Netanyahu is widely seen – even by some opponents – as the most plausible prime minister.

The 63-year-old prime minister has cultivated an image as a tough leader who protects Israelis’ security in a fast-changing region, helping draw world attention to Iran’s suspect nuclear program and responding forcefully to rocket fire from the Hamas-controlled Gaza Strip.

A Smith Research poll published in the Jerusalem Post Friday showed the Likud-Yisrael Beitenu alliance would win 33 seats compared to 14 to his hawkish rival the Jewish Home party and 17 to the Labor party. The bloc of religious and nationalist parties was poised to win 66 seats, according to Smith Research, which surveyed 800 people and had a margin of error of 3.5 percentage points. Other polls showed similar results.

A hard-line alliance would be the easy choice for Netanyahu. But it could also have negative consequences for his country’s international image.

While Netanyahu has professed to favor the establishment of a Palestinian state as part of a peace agreement, Likud is now dominated by hard-liners who oppose territorial concessions to the Palestinians. The leader of a likely coalition partner, the pro-settler Jewish Home, has gone even further, saying Israel should annex large swaths of the West Bank, the heartland of any future Palestinian state.

During a tumultuous four-year term, Netanyahu has drawn fierce criticism internationally for his handling of the Palestinian issue and his refusal to stop building Jewish settlements in the West Bank and east Jerusalem. More than 500,000 Israelis now live in these areas, which were captured by Israel during the 1967 war and are claimed by Palestinians along with Gaza for their state.

The Palestinians refuse to negotiate while settlements continue to be built, saying the construction is a sign of bad faith.

Netanyahu says talks should begin without any preconditions. He also says a partial settlement freeze he imposed in 2009 and 2010 failed to bring about negotiations, and says the real obstacle to peace is Palestinian intransigence.

Internationally, Netanyahu has found little sympathy. His allies in Washington and Europe have condemned recent settlement plans in unusually harsh language, and European countries have begun to hint of punitive measures against Israel.

In a sign of displeasure with Netanyahu, the U.N. General Assembly voted overwhelmingly in November to recognize a Palestinian state in the West Bank, Gaza and east Jerusalem. Netanyahu rejects a pullback to Israel’s 1967 lines.

This week, President Barack Obama was quoted as saying that Netanyahu’s unwillingness to make concessions to the Palestinians is plunging Israel into diplomatic isolation. “Israel doesn’t know what its own best interests are,” Obama was quoted by American columnist Jeffrey Goldberg, who is known to have good contacts in the White House, as saying.

Netanyahu responded to the report in an interview Saturday night to Israel’s channel 2 TV. He said relations are good with the U.S. but “there are differences of opinion.”

“When they tell me to return to 1967 lines, I stand against it. When they tell me not to build in Jerusalem, I stand against it,” Netanyahu said.

“It would be terribly easy to capitulate — I could return to indefensible borders and divide Jerusalem and let Hamas get 400 meters from my home … (But) I have to stand firm on our vital interests even when it’s not popular, that is the prime minister’s job,” he said.

Some Israelis conclude that the country’s very existence could be in question if it does not reach a peace accord with the Palestinians. The continued occupation of millions of disenfranchised Palestinians will turn Israel into an apartheid-like country with a Jewish minority ruling over what will ultimately be an Arab majority, they say.

This argument, once considered radical in Israel, has begun to go mainstream. Perhaps its most vocal proponent is former Foreign Minister Tzipi Livni, who four years ago led peace talks with the Palestinians and recently founded a new party whose primary aim is to reach a peace agreement. “Netanyahu is leading us toward the end of the Jewish state,” she said recently.

Netanyahu himself alluded to the issue Friday in an interview with Israel TV.

“I am not in favor of a binational state,” he said. “We need to reach a solution. I don’t want to rule the Palestinians and I don’t want them to rule us and threaten our existence.”

However, he appears in no hurry to act accordingly, and the left and its supporters are increasingly bold in predicting doom.

Earlier this month, the recently retired head of Israel’s Shin Bet internal security service, Yuval Diskin, criticized Netanyahu for failing to aggressively press ahead with peace efforts during a time of calm.

“If I cause the Israeli voter to think twice before choosing parties and leaders that are not worthy because they are actually not leading us where we should be going, I’ve done my part,” Diskin said.

Such criticism has fueled speculation that Netanyahu will explore the possibility of bringing centrist partners into his coalition. The likely candidates would be Livni’s new party The Movement and There is a Future, another newcomer led by former TV talk-show host Yair Lapid.

Both candidates have promised to drive a hard bargain. Appearing on TV Thursday night, Livni said she would join Netanyahu only if there are serious peace efforts and she is given a key role.

“I will not sit in a government that will continue the stalemate,” she said.

Lapid has indicated more flexibility, focusing his campaign primarily on the plight of Israel’s struggling middle class. But he told The Associated Press this week that he would not be a “fig leaf” for an extremist government.

The winner of Tuesday’s election will have six weeks to put together his coalition. Netanyahu has sent mixed signals in interviews, saying that he wants a broad government to ensure stability but also saying that partners will have to accept his policies. The conventional wisdom is that the coalition will be even more hard-line than the outgoing coalition.

The prospect of another Netanyahu term has fueled a sense of despair among Palestinians, who fear that his ambitious plans for settlement construction over the next four years could kill their dreams of independence. Their hope is that Obama, emboldened by his own re-election, will put heavy pressure on Netanyahu to return to negotiations.

“The first strong impression is that peace is not on the agenda of the Israeli parties, and it’s clear that Netanyahu is winning,” said Mohammed Ishtayeh, an aide to President Mahmoud Abbas.