AFP - Benjamin Netanyahu began his second term as Israeli prime minister on Wednesday at the helm of a right-wing government that has raised fears about the future of the Middle East peace process.
"A difficult task lies ahead of us and we must start working immediately," Netanyahu said at a change of power ceremony in the presence of President Shimon Peres and former prime minister Ehud Olmert.
The 59-year-old Netanyahu will head a coalition includes his right-wing Likud, the ultra-nationalist Yisrael Beitenu, ultra-Orthodox Shas and a small religious faction as well as the centre-left Labour party.
In his inaugural address to the 120-seat parliament on Tuesday, Netanyahu said the biggest threat Israel faced was the possibility of "a radical regime armed with nuclear weapons" -- a clear reference to arch-foe Iran.
But the hawkish Likud leader said he would pursue a "final accord" with the Palestinians, while making no mention of a future Palestinian state.
"Under the final accord, the Palestinians will have all the rights to govern themselves except those that can put in danger the security and existence of the state of Israel," Netanyahu said.
The Palestinians have given a cold welcome to the new government, with president Mahmud Abbas saying Wednesday that Netanyahu "does not believe in peace" and urging the international community to pile pressure on Israel.
"Benjamin Netanyahu never believed in a two-state solution or accepted signed agreements and does not want to stop settlement activity. This is obvious," Abbas told the official Palestinian news agency.
"We have to tell the world that this man does not believe in peace, so how should we deal with him? Let's put the ball in the world's court so that it puts pressure on him and assumes its responsibilities."
Since being charged with forming a government after the February 10 general election, Netanyahu has repeatedly made clear that his priority was confronting Iran, rather than moving the hobbled peace talks forward.
"It is shameful that decades after the Holocaust, calls by Iranian leaders to destroy Israel are greeted with indifference by the world," he told MPs.
"Contrary to what happened during the last century, today we have the means to defend ourselves."
A poll published in Israel's Haaretz newspaper found that 54 percent of Israelis are disappointed with the new government, mainly because of its size.
With 30 ministers Netanyahu's cabinet will be the largest in Israel's 60-year history, the product of weeks of horse-trading in the country's notoriously chaotic political landscape.
Israel's Peace Now anti-settlement watchdog has called the new cabinet "one of the most right-wing governments ever known in Israel."
The new foreign minister is Avigdor Lieberman, a firebrand ex-bouncer and immigrant from the former Soviet republic of Moldova who has been branded a "racist" by critics for his anti-Arab diatribes.
The international community has meanwhile expressed alarm over the future of already stalled peace talks with the Palestinians relaunched in November 2007.
The European Union last week warned of "consequences" if the new government does not commit itself to the principle of the two-state solution, saying relations would become "very difficult."
Netanyahu has never supported the creation of a Palestinian state, a principle to which Israel committed itself under the 2003 roadmap agreement, a blueprint for peace adopted by the international community.
Netanyahu, who put the brakes on the Oslo autonomy accords during his first term as premier in 1996-1999, says economic conditions should be improved in the occupied West Bank before negotiations take place on other issues.
But keen not to antagonise key ally Washington, where US President Barack Obama has vowed to vigorously pursue the peace talks, the new Israeli leader has said he will continue the negotiations with the Palestinians.
Despite his hardline rhetoric, Netanyahu signed several deals with the Palestinians under US pressure during his first term as premier, and some analysts in Israel say he would do so again if pressed by Washington.