(CNN)An already frosty relationship between the Obama administration and Israeli Prime Minister Benjamin Netanyahu's government could become even more frigid with the latest shuffling of ministers in Jerusalem.
New Israeli defense minister: A hardliner the U.S. can 'do business with'
But it could also yield cooperation between the two countries as the new defense minister, a hardliner looking to revamp his image, provides an opening for pragmatic cooperation.
The controversial Avigdor Liberman has replaced the respected Moshe Ya'alon as defense minister, leading some to call the coalition the most right-wing in Israeli history. The White House has said the new arrangement raises "legitimate questions" about the commitment of Netanyahu's government to a two-state solution with the Palestinians.
The move comes at a time when President Barack Obama has turned his attention to other regional priorities after years of frustration with the peace process and the latest effort at an Israeli-Palestinian deal -- launched on Friday -- has been undertaken by France to little fanfare.
"Nobody can wrap their heads around where we go from here," a senior administration official said. "It feels like it's moving farther and farther away."
Still, the public U.S. response toward Liberman's appointment has been muted, dampening the notion that the appointment of the ultra-nationalist -- who in the past has promised harsh measures against Palestinians engaged in violence, called for stripping some Israeli Arabs of their citizenship and pushed for expansion of West Bank settlements -- would sour the critical U.S. security relationship with Israel.
"We appreciate Mr. Ya'alon's leadership and partnership as defense minister, and we look forward to working with his successor," State Department spokesman John Kirby said last week. "Our bonds of friendship are unbreakable, and our commitment to the security of Israel remains absolute."
Across the administration, several officials see Liberman as a pragmatist they can do business with.
Several senior U.S. officials say despite their misgivings about his approach to the Israeli-Palestinian conflict, their past experience with Liberman has proven him to be pragmatic and flexible when serving in the government -- as opposed to the heightened rhetoric he deploys while in the opposition -- and have good reason to believe there will be a similar dynamic now.
On Sunday another coalition member, Naftali Bennett, who heads a party further to the right than both Netanyahu's Likud and Liberman's Yisrael Beiteinu, blasted both men for putting out statements backing a two-state solution.
David Makovsky, who served on Secretary of State John Kerry's peace negotiating team, also remembers Liberman as a "pragmatic" foreign minister and an ally Kerry's in quest for peace -- a stark contrast to Ya'alon, who reportedly said Kerry's diplomatic efforts were done out of "obsession" and a "messianic" sense.
"Netanyahu couldn't have offered some of the concessions he was willing to make without Liberman's support," Makovsky said.
Indeed, his role as defense minister is traditionally a more pragmatic one than that of foreign minister, a post he once held to the great frustration of American officials.
When he was appointed foreign minister in 2009, the administration essentially boycotted him after harsh rhetoric and proposals toward the Palestinians. Then-Secretary of State Hillary Clinton and other top administration officials dealt directly with then-Foreign Minister Ehud Barak on most foreign policy issues, relegating Liberman to meeting with lower-level officials on visits to Washington.
As defense minister, Liberman is entrusted with maintaining the security relationship with the U.S. and daily cooperation with the Pentagon, a critical portfolio that has largely been immune to diplomatic tensions between the two countries. Moreover, on big-ticket security challenges like Syria, terrorism in the Sinai and the threat posed by Hezbollah, the U.S. and Israel are in agreement.
"As foreign minister Liberman had the ability in the past to lob rhetorical grenades that required no response," Makovsky said. "Now that he is defense minister and effectively the chief action officer, there can't be a gap between his rhetoric and his actions. And nobody wants to weaken the U.S.-Israel defense relationship."
He added, "Whatever policy disagreements happen with Netanyahu, when it comes to Israel's defense, it has always been a Wall of China between the security relationship and policy disagreements. "
The administration's desire for a more pragmatic, less antagonistic relationship is reflected in the ongoing negotiations between the two countries on a new 10-year U.S. military aid package to Israel before Obama leaves office. The White House hopes the agreement, which one official said would "constitute the largest single pledge of military assistance to any country in U.S. history," would cement the President's legacy as a defender of Israeli security, despite criticism from some quarters that he is anti-Israel. It also could give a boost to the likely Democratic presidential nominee, Hillary Clinton.
With peace negotiations primarily handled by Netanyahu's office, Liberman is also unlikely to be a decisive factor in the agreement.
But Liberman can either be an asset or a spoiler if the White House decides to launch a last-ditch effort to restart Israeli-Palestinian peace talks.
U.S. officials say there is some desire to make one last attempt to restart negotiations, although the White House has not made a final decision.
Netanyahu, for his part, has spoken about a possible Egypt plan to re-launch the 2002 Arab Peace Initiative, in which Arab states could make some gestures to Israel in order to secure better conditions for the Palestinians.
As defense minister, Liberman has authority over many day-to-day activities related to the Palestinians, including security and economic cooperation, checkpoints and settlement expansion.
U.S. officials believe that Liberman, who lives in a Jewish settlement in the West Bank but is not viewed as an extremist in the settlement movement, may be persuaded by Israel's army to continue its recent steps to improve life for Palestinians as a way to ease tensions.
"Liberman believes in a two-state solution," one senior U.S. official said. "His version may be different than some peoples', but he isn't an opponent of the idea. I think we are going to be able to do business with him."