Israel's Mr Ariel Sharon has begun a second term at the head of a right-wing coalition that includes opponents of a Palestinian state and supporters of Jewish settlement on occupied Palestinian land.
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Mr Ariel Sharon
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The 120-member Knesset voted 66-48 in favour of the government presented by Mr Sharon, whose right-wing Likud party won the January 28th general election.
The new government - which has been condemned by Palestinians - has extreme right-wing elements including the National Union party, some of whose members advocate forcing Palestinians out of the West Bank.
The four-party coalition consists of Mr Sharon's Likud; the National Religious Party, a leading patron of Jewish settlers in the West Bank and Gaza Strip; theNational Union; and Shinui, which seeks to curb the influence of religion and believes there is no point in renewing peace talks until Mr Yasser Arafat has been replaced.
Mr Sharon today repeated his position that Palestinians waging a 29-month-old uprising for statehood must stop what he called "incitement and terror" and insisted they implement deep democratic reforms before any peace negotiations can resume with Israel.
Mr Sharon, who was first elected prime minister in February 2001, said Palestinian leader Mr Arafat must be replaced and ruled out a basic Palestinian demand of the return of Palestinian refugees to homes they fled or were forced to flee by Israel during the 1948 Middle East war.
Israeli forces have reoccupied West Bank cities and mounted frequent attacks in the Gaza Strip as part of a campaign Israel describes as an attempt to curb attacks by militants.
An opinion poll published in Israel's Maarivnewspaper on Friday showed Israelis have few hopes Mr Sharon's coalition could bring peace or heal an economy reeling from the effects of more than two years of violence.
According to the survey, only a quarter of Israelis believed security or the economy would improve.A further 23 per cent said they expected the economy would deteriorate further, despite markets being buoyed by Mr Sharon's naming of former foreign minister, Mr Benjamin Netanyahu, as finance minister.