  We use Monte Carlo simulations and analytical arguments to analyze a
frustrated Ising model with nearest neighbour antiferromagnetic coupling $J_1$
and next nearest neighbour coupling $J_2$. The model is inspired on the physics
of pnictide superconductors and to some extent we argue that it can be more
representative of this physics than the Heisenberg counterpart. Parameters are
chosen such that the ground state is a columnar or striped state, as observed
experimentally, but is close to the transition to the simple Neel ordered
antiferromagnetic state $R = J_2/|J_1|\gtrsim 0.5$. We find that a nematic
phase is induced close to $R = 0.5$ by finite size effects and argue that this
explains experiments in imperfect samples which find a more robust nematic
state as the quality of the sample decreases [A. Jesche et al., Phys. Rev. B
81, 134525 (2010)]. Including the effect of a weak coupling with the lattice we
find that a structural transition occurs associated with a nematic phase, with
a magnetic transition occurring at a lower temperature. These two transitions
merge into a single structural and magnetic transition with a stronger
first-order character for larger spin-lattice couplings. These two situations
are in agreement with the different phenomenologies found in different families
of pnictides.
