This work considers the protograph-coded physical network coding (PNC) based on Alamouti space-time block coding (STBC) over Nakagami-fading two-way relay channels, in which both the two sources and relay possess two antennas. We first propose a novel precoding scheme at the two sources so as to implement the iterative decoder efficiently at the relay. We further address a simplified updating rule of the log-likelihood-ratio (LLR) in such a decoder. Based on the simplified LLR-updating rule and Gaussian approximation, we analyze the theoretical bit-error-rate (BER) of the system, which is shown to be consistent with the decoding thresholds and simulated results. Moreover, the theoretical analysis has lower computational complexity than the protograph extrinsic information transfer (PEXIT) algorithm. Consequently, the analysis not only provides a simple way to evaluate the error performance but also facilitates the design of the joint channel-and-PNC (JCNC) in wireless communication scenarios.