The first comes from the middle of Exodus, exactly two months after God brought the Israelites out of Egypt.
Then Moses climbed the mountain to appear before God. Yahweh called to him from the mountain and said, “Give these instructions to the family of Jacob; announce it to the descendants of Israel: ‘You have seen what I did to the Egyptians. You know how I carried you on eagles’ wings and brought you to myself. Now if you will obey me and keep my covenant, you will be my own special treasure from among all the peoples on earth; for all the earth belongs to me. And you will be my kingdom of priests, my holy nation.’ This is the message you must give to the people of Israel.”
So Moses returned from the mountain and called together the elders of the people and told them everything Yahweh had commanded him. And all the people responded together, “We will do everything Yahweh has commanded.” So Moses brought the people’s answer back to Yahweh.
(Exodus 19:3-8, NLT)
God's salvation of the people is entirely an act of mercy and grace, but at the same time Israel's special status is contingent on their obedience. This is their choice though, one which the people accept. Very soon in chapter 20 God gives them the Ten Commandments, a short expression of what the people had promised to obey, the first of which is to worship no other God than Yahweh. At the beginning of the Israelite nation the people bound themselves to worship God alone and obey his instructions. Andrew Brown recently gave a definition of "covenant" as being "a binding agreement/contract between two parties that defines the conditions of their relationship." Under such a definition the Sinai agreement is most definitely a covenant, where Israel becomes Yahweh's special people and Yahweh their sole god.
I think the Bible suggests that it would have been possible for them to reject God's covenant at that time, though I won't speculate on what the consequences would have been. But the people did accept God's covenant, and the Bible then goes on in many places to explain what the consequences would be if they ever broke it. One short passage I chose was this one from Deuteronomy, from shortly before the Israelites entered Canaan:
In the future, when you have children and grandchildren and have lived in the land a long time, do not corrupt yourselves by making idols of any kind. This is evil in the sight of Yahweh your God and will arouse his anger. Today I call on heaven and earth as witnesses against you. If you break my covenant, you will quickly disappear from the land you are crossing the Jordan to occupy. You will live there only a short time; then you will be utterly destroyed. For Yahweh will scatter you among the nations, where only a few of you will survive. There, in a foreign land, you will worship idols made from wood and stone—gods that neither see nor hear nor eat nor smell.
But from there you will search again for Yahweh your God. And if you search for him with all your heart and soul, you will find him. In the distant future, when you are suffering all these things, you will finally return to Yahweh your God and listen to what he tells you. For Yahweh your God is a merciful God; he will not abandon you or destroy you or forget the solemn covenant he made with your ancestors.
(Deuteronomy 4:25-31, NLT)
Although breaking any of God's instructions and laws was serious, there were contingencies: the sacrificial system. But idolatry is different, for it goes against the entire basis of the covenant itself. If Israel breaks the covenant by choosing other gods, then Yahweh will in effect revoke their special status, displacing them from the land. If the people want idols God will let them have them, but without his blessings.
But in an amazing act of grace, God promises to forgive them if they repent and search for him again. I do not think that the 'solemn covenant of their ancestors' refers to the Sinai covenant from just a generation before, but to Abraham's of several hundred years before. Despite their sin, there is hope for those who still desire God.
