The rightward change following Israel's elections is viewed as an obstacle to Obama who has pinned his hopes on the Middle East peace.
The polls gave Foreign Minister Tzipi Livni's center-left Kadima party a narrow lead in the parliamentary elections over the right-wing Likud party, led by former prime minister Binyamin Netanyahu, who is known for his nonconformity with a peace process.
This is while the Likud leader has reportedly met with the chairman of the third-largest party in elections, Yisrael Beiteinu, Avigdor Lieberman and Shas leader Eli Yishai to discuss forming a coalition with the right wing parties.
Analysts say Livni's side, though apparently more inclined towards a settlement, would not be able to avoid influence by the Likud leader who has openly expressed opposition to Palestinian rights.
The overall result would translate to a hurdle to the US President Barack Obama who has pledged to prioritize the Middle East affairs.
"This is like hanging a 'closed for the season' sign on any peacemaking for the next year or so," former US peace negotiator Aaron David Miller was quoted by Washington Post as saying.
Miller added that "you may get a (Israeli) government good at war-making, not peacemaking." "It's really going to create a major headache for the administration."
The daily also reminded of the hard time Netanyahu used to give the former US president Bill Clinton during the then administration's peace efforts.
"Bill Clinton must be hoping, on behalf of his wife, Secretary of State Hillary Clinton, that the next prime minister of Israel is not Benjamin Netanyahu," said Washington-based non-partisan grassroots organization, AFP reported.
"He had several bitter experiences in negotiations with him 11 years ago. The Obama team could have similar experiences with the American-born Netanyahu."
"The election results are bad news for the region's security and stability," said Ori Nir, spokesman for Americans for Peace Now.
"They are very bad news for the Obama administration, which seems determined to push for Israeli-Palestinian and Israeli-Arab peace," he added.
"Netanyahu revels in his reputation as a right-wing warmonger, who has made no secret of his refusal to negotiate a Palestinian state west of the Jordan River," said the Council for the National Interest Foundation.
The former premier has, however, been speculated not to risk losing the US support by showing cooperation.
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