Obama ready to work with new Israeli government

US President Barack Obama on Thursday indicated he is ready to work with Benjamin Netanyahu's new hardline Israeli government, hailing a "deep and abiding partnership" between the two nations despite recent tumult.

"President Obama looks forward to working with Prime Minister Netanyahu," the White House said, in a businesslike statement that follows fierce pre-election exchanges between the two men.

Netanyahu on Wednesday reached an 11th hour coalition deal to stay in power, securing the backing of the far-right Jewish Home party, which strongly backs settlement activity.

The move is likely to complicate Israel's relationship with Washington, already strained by Netanyahu's opposition to a Palestinian state and a nuclear deal with Iran.

"The United States places great importance on our close military, intelligence, and security cooperation with Israel, which reflects the deep and abiding partnership between both countries," the White House statement said.

"We also look forward to continuing consultations on a range of regional issues, including international negotiations to prevent Iran from acquiring a nuclear weapon and the importance of pursuing a two-state solution."