A Hezbollah-backed billionaire has won enough support to become Lebanon's prime minister, in a move that Hillary Clinton said would damage the country's relationship with the US.
Hezbollah managed to forge a coalition to back Najib Mikati after bringing down the government of the pro-American Saad Hariri two weeks ago.
President Barack Obama is likely to retaliate by suspending some or all of its aid to Beirut. The US administration had earmarked $246m (€179.5m) in support this year, including $100m (€73m) in military aid and $37m (€27m) for counter-terrorism operations.
Hezbollah, which is financially backed by Iran and Syria, is listed as a terrorist entity by Washington.
Mrs Clinton, the US secretary of state, said the power shift would "clearly have an impact on our bilateral relationship."
Israel, which already has Hezbollah ally Hamas on one side, will also be concerned by a Hezbollah-led government likely to insist on a more confrontational approach in the region.
Mr Mikati's appointment, secured after 68 out of 125 members of parliament expressed their support, sparked a "day of rage" in Lebanon, with crowds in Beruit and towns across the north of the country blocking roads, setting tyres on fire and ransacking the offices of a prominent supporter of the new prime minister.
Mr Mikati and the man he replaced, Mr Hariri, are both Sunnis, and the protesters mocked Mr Mikati as a "traitor" for agreeing to work with Hezbollah, an Iranian-backed Shia militant group.
"They are taking us for idiots," said a Rana Fatfat, a Sunni lawyer at a protest. "We will fight them through sit-ins and peaceful protests because we cannot match their military might."
The latest resurgence in Lebanon's bitter, long-running political and civil strife follows Mr Hariri's refusal to disavow a United Nations special tribunal investigating the murder of his father, Rafiq, another billionaire former prime minister.
Mr Hariri senior was killed by a car bomb in 2005, which at the time was widely blamed on Syria. The tribunal is expected to indict Hezbollah members as having carried out the killing.
Mr Mikati will spearhead a policy of non-cooperation with the tribunal however.
Hezbollah's triumph in securing power lay not just in withdrawing 11 sympathetic cabinet members from Mr Hariri's government but in persuading Walid Jumblatt, the long-standing leader of the Druze minority in Lebanon, to switch the votes of his MPs.
It then had to find a friendly Sunni politician to lead the government. Under Lebanon's constitution, the president has to be Christian, the Prime Minister Sunni and the speaker Shia.
Mr Mikati said that being backed by Hezbollah did not make him a "Hezbollah prime minister".
"I will co-operate fully with all Lebanese to form a new government that protects their unity and sovereignty," he said.
Hassan Nasrallah, the Hezbollah leader, also tried to calm Sunni fears that its seizure of the reins of power amounted to a coup.
"The new government will not be a Hezbollah government nor will it be led by Hezbollah," he said. "We don't want power."