JERUSALEM -LRB- CNN -RRB- -- Israeli media are buzzing with reports that right-wing nationalist Avigdor Lieberman may become Israel 's next foreign minister . Avigdor Lieberman is loathed by ultra-orthodox parties because of his support for a Palestinian state . The appointment of Lieberman , a polarizing figure in Israeli politics , could complicate the stalled peace talks with the Palestinians . It could also further strain relations between Israel and moderate Arab countries . Prime Minister-designate Benjamin Netanyahu is still in the process of forming Israel 's next government . Israeli newspaper Haaretz reported this week that it is likely that he will select Lieberman as foreign minister . The paper quoted a source close to the negotiations between Netanyahu 's Likud Party and Lieberman 's Yisrael Beiteinu . Lieberman would replace outgoing Foreign Minister Tzipi Livni , head of the moderate Kadima party , which secured the most number of parliament seats in last month 's election -- but not enough to form a coalition government . Netanyahu has been unable to woo moderate parties , including Kadima , into his government . He may be forced to concede some key ministerial posts to Lieberman 's party , which would be the second largest faction in the new coalition government behind Likud . Netanyahu has vowed to form a broad-based government , but it is unclear how he can keep that promise since Kadima and the moderate Labor Party have indicated that they plan to form an opposition to a Likud-led government . `` Although Netanyahu has reportedly largely agreed to making Lieberman his foreign minister , he is thought to still be weighing the potential political damage the appointment of the hawkish politicians would do to the image of his government , '' Haaretz reported . The Jerusalem Post , quoting unnamed diplomatic sources , reported that although Israel 's ties with western Europe may suffer if Lieberman becomes foreign minister , he may help improve the Jewish state 's ties with Russia and eastern Europe . Lieberman is in a peculiar spot on the Israeli political spectrum He is routinely categorized as a right-wing hawk . But as a secularist who supports an independent Palestinian state , he is loathed by Israel 's ultra-orthodox parties , including Shas , which holds 11 seats in the Knesset and is another potential member of Netanyahu 's coalition . It is unclear how moderate Arab countries , who are still outraged over Israel 's recent military operation in Gaza , would react to Foreign Minister Avigdor Lieberman . Egypt , one of only four Muslim countries that have full diplomatic ties with Israel , has been trying to negotiate a broader cease-fire between Israel and Gaza 's Hamas leadership . It is unclear whether those indirect negotiations would continue under the new Israeli government . Lieberman has said he is unwilling to directly or indirectly negotiate with Hamas , which is considered a terrorist organization by Israel for its refusal to recognize Israel and renounce violence against the Jewish state . Lieberman does support `` the creation of a viable Palestinian state , '' which is the bedrock of U.S. policy in the region . He restated that support in a Jewish Week article , written shortly after last month 's election . That puts him at odds with Netanyahu , who does not support a two-state solution . However , Lieberman 's support of a Palestinian state comes at a high price . He has stated that he would oppose any peace agreement that would divide Jerusalem as a shared capital between Israel and a Palestinian state . Lieberman , who migrated from the former Soviet Union to Israel in 1978 , has also called for Israel 's boundaries to be redrawn to exclude much of Israel 's Arab minority , a move that would strip them of their citizenship . Palestinians with Israeli citizenship make up about 20 percent of the Jewish state 's population . Lieberman frequently clashes with Arab members of the Knesset and has called for them to be tried and executed for meeting with leaders of Hezbollah and Hamas . He wants all Knesset members , both Arabs and Jews , to prove their loyalty by swearing allegiance to the Israeli flag and national anthem . Arab Knesset member Ahmed Tibi has warned that Lieberman 's rising popularity reflects a dangerous trend . `` We are talking about a pure and obvious fascist phenomena invading the Israeli society , '' Tibi said . `` During the last years , racism became mainstream in the Israeli society . '' Lieberman 's supporters credit him with offering clear solutions to Israel 's complicated problems . In his article in Jewish Week , he rejected accusations from his critics that his party is racist . `` I stand at the head of the most diverse political party in the Knesset , '' he wrote , noting that his party 's Knesset members have included four women , three people with disabilities , a Jewish convert and a Zionist . `` I find it a bit rich to be called a bigot . '' He said that he `` look -LSB- s -RSB- forward to working with President Obama '' since `` U.S.-Israel relations are as strong as ever , and that our shared values and interests make our friendship unshakable . '' Yossi Klein Halevy of the Adelson Institute of Strategic Studies said Lieberman is tapping into the dark side of Israelis ' concerns about security , particularly as militants in Gaza continue to routinely fire rockets on southern Israel `` Lieberman is riding an ugly wave of resentment among many Jewish Israelis toward the Arab-Israeli minority , '' he said . Ynetnews.com political correspondent Attila Somfalvi recently wrote that Lieberman has become `` the leader of those who lost any hope or faith in the possibility of securing peace or engaging in talks with the Arabs . '' `` The war in Gaza indeed restored the public 's sense of security and lowered the anxiety level , yet Lieberman is perceived as the man who will know how to do what needs to be done so that no more missiles land around here , '' she wrote .