Netanyahu Vows to Seek Peace, Security as Prime Minister

"We will move in a positive way to bring an end to the conflict between us and our neighbors," Netanyahu said, but he added that "extreme Islam is threatening Israel and the countries of the region," and needs to be confronted.

A cabinet of 29 ministers joins him in the new government -- among the largest in Israeli history following the weeks of deal-making needed to form a majority in the country's 120-member parliament, or Knesset.

The result was a potentially fractious coalition that was arguing with itself from the start. Even as Netanyahu made his introductory remarks, some members of the Labor Party, unhappy that their leadership had chosen to join Netanyahu's government, heckled from the floor.

But Netanyahu pledged that his government, Israel's 32nd since its founding as a modern state in 1948, would unite in facing such domestic issues as an eroding economy as well as what he said is the country's "greatest danger": Iran's potential development of nuclear weapons.

Netanyahu's conservative Likud party was not the top vote-getter in February's Israeli elections, finishing second, with 27 members of parliament, behind the centrist Kadima party, with 28. In recent years Kadima members have viewed negotiations with the Palestinians more favorably than Likud.

But in the wake of a three-week war against the Hamas movement in Gaza and public skepticism over the future of peace talks with the Palestinians, Netanyahu was judged by President Shimon Peres to have the best chance of creating a government. Netanyahu's coalition includes the more liberal Labor Party, whose leader, former prime minister Ehud Barak, will remain as defense minister. But it leans heavily on support from the country's orthodox religious factions and the nationalist Yisrael Beitenu group led by Knesset member Avigdor Lieberman.

Lieberman's appointment as foreign minister, also to be confirmed Tuesday, seemed to capture a dynamic in which the domestic course set by Israelis is at odds with international expectations. Deeply mistrustful of the Palestinians and of Arabs with Israeli citizenship, Lieberman campaigned on pledges to promote the establishment of a loyalty oath to the Jewish state, contributing to perceptions that he holds racist views. He lives in a Jewish settlement in the West Bank.

Absent from the various coalition agreements signed between Netanyahu and the other parties in recent days is any mention of an independent Palestine -- the "two-state solution" that forms the current basis of U.S. and international policy toward the Arab-Israeli conflict. Included instead are promises to abide by previous "international agreements," a commitment to toppling Hamas, an Islamist Palestinian movement that controls Gaza, and efforts to "prevent the nuclear armament of Iran."

In remarks Tuesday, Netanyahu said he was open to talks with the Palestinians. "We will carry out peace negotiations with the Palestinian Authority with a view to reaching a final accord. We don't want to govern another people," he said.

Netanyahu, born in 1949 and among the first generation of political leaders to be native Israelis, has built a reputation as a political pragmatist. As prime minister in the late 1990s, he ceded territory to the Palestinians under pressure from then-President Bill Clinton, and his government collapsed soon after because of opposition back home.

This time he is drawing a strict line on security issues. A veteran of the elite Sayerat Matkal military unit, his brother was killed in the 1976 Israeli commando raid that freed passengers on a hijacked airliner at Uganda's Entebbe Airport. He has called Iran's nuclear program and armed support for Hamas a regional security concern so grave it should take priority over the Arab-Israeli dispute.

He faces pressing domestic concerns. The global economic crisis has begun hitting Israel's banks and companies harder than it did initially and religious political parties have pushed for more control over religious education. Analysts predict strains in the new government between ultra-Orthodox members of the Knesset and Lieberman, an émigré from Moldova who promotes the institution of civil marriage and other secular reforms.

But Israeli officials acknowledge that, between offering Lieberman the position as the country's top diplomat and putting economic development ahead of a negotiated settlement with the Palestinians, they'll need to show progress to the White House, the European Union, and to Arab states such as Egypt and Jordan that have signed peace agreements.

"We have to build a quick level of trust and transparency" on projects that will translate into Palestinian jobs and improvements in day-to-day life on the West Bank, said one Netanyahu adviser, who spoke on condition of anonymity. "Bibi is going to take charge of this issue," he said, using the new prime minister's nickname. "Previous governments were focused on reaching what proved to be an elusive final status agreement, and you say well, 'what about these projects?' This is a bottom-up approach."

Palestinians are skeptical, and they are not alone.

Palestinian Authority President Mahmoud Abbas, head of Fatah, the Palestinian faction that dominates the West Bank and that favors negotiations with Israel, told an Arab summit meeting in Qatar earlier this week that the "rise of extremist forces" in Israel will mean accelerated Jewish settlement in the occupied West Bank and in the Arab neighborhoods of East Jerusalem, and little prospect of progress toward peace.

The situation "looks bleak from a Palestinian perspective," said Palestinian pollster and analyst Khalil Shikaki. "No political agreement. No change on the ground. Increased settlements."

European Union officials have said that Netanyahu's refusal to commit to an independent Palestinian state would have "consequences," such as a disruption in improved trade ties. The Obama administration has not made its Middle East policy explicit, but there are strong hints of the direction. Secretary of State Hillary Clinton has criticized aspects of Israeli settlement policy, and the president last week called progress toward an independent Palestinian state "critical."

"We hear the echoes from Europe, from North America," said an Israeli government official, who did not want to be quoted by name before the new government takes office. "There is a lot of wariness, and we will have to deal with that."