JERUSALEM - Former Foreign Minister Avigdor Lieberman went on trial Sunday on fraud and breach-of-trust charges, pleading innocent in a case that could have deep implications for the makeup of Israel's next government.

Lieberman, the leader of the ultranationalist Yisrael Beitenu Party and a key ally of Prime Minister Benjamin Netanyahu, is accused of trying to advance the career of a former diplomat who relayed information to him about a separate criminal investigation into Lieberman's business dealings.

The outcome of the trial will determine whether the hard-line Lieberman will be able to return to the Israeli Cabinet or whether his fast-rising political career will come to a premature end.

Lieberman's Yisrael Beitenu ran on a joint list with Netanyahu's Likud Party in a parliamentary election last month. Their combined bloc emerged as the largest faction in the legislature and is expected to be the dominant member of the next ruling coalition. Netanyahu is still negotiating with potential coalition partners.

Lieberman has made clear that he wants to return to the Foreign Ministry, but he is barred from serving in the Cabinet while he is on trial. He has said that if he's convicted, he will resign from parliament.

Depending on the severity of the conviction, Lieberman could be barred from seeking office again for years to come. In the meantime, he is allowed to serve in parliament.

The situation has put Netanyahu in a delicate position. With the trial expected to last well into the spring, it is not clear whether Netanyahu is willing or able to hold open the important foreign minister's job for his political ally.

If he offers the post to another party, however, his alliance with Lieberman could become strained.