New Netanyahu government wins MPs' approval as Obama urges deal

 The Israeli parliament late Thursday narrowly approved Prime Minister Benjamin Netanyahu's new government as the United States insisted the Jewish state must forge a deal with the Palestinians for its own good, AFP reports.

The new administration marks a shift to the right and looks likely to complicate Netanyahu's fraught relationships with the Palestinians and with US President Barack Obama.

"We will safeguard our security and strive for peace," Netanyahu said in a speech ahead of the parliamentary vote, which was interrupted by loud laughter from the opposition and heckling from Arab Israeli lawmakers, three of whom were ejected.

After two months of coalition horse-trading, Thursday's session was delayed for another two hours to give Netanyahu more time to placate senior members of his Likud party.

They were dissatisfied by the portfolios they received, after Netanyahu was forced to hand out senior ministerial positions to coalition partners.

Opposition members called the premier's deal-making "a farce", and the coalition was finally approved by a razor-thin vote of 61-59.

Netanyahu stressed the need to change the system of governance to increase Israel's political stability and implied he would seek to expand his narrow coalition.

But opposition head Isaac Herzog firmly rejected any notion of joining Netanyahu's government.

"No decent leader would join this circus that you've formed at the last moment with barely a majority for the sole purpose of perpetuating your regime," Herzog said. "Your way is not my way."

Netanyahu's lineup is dominated by right-wing and religious parties and commands a slender majority of 61 of the parliament's 120 seats, leaving it vulnerable should a disgruntled MP turn on the premier.

On the eve of the March 17 election, Netanyahu triggered a diplomatic backlash by promising there would be no Palestinian state on his watch.

Although he has since sought to backtrack, reviving the peace process is unlikely to be a priority for his new cabinet, which features several ministers bent on expanding settlement construction on land the Palestinians want for a future state.

    'Distant prospect' 

 Speaking shortly after the vote confirming the new coalition, Obama said Israel's long-term security would be best served by reaching an agreement to live alongside a recognised Palestinian state.

"I continue to believe a two-state solution is absolutely vital for not only peace between Israelis and Palestinians, but for the long-term security of Israel as a democratic and Jewish state," Obama told a Camp David news conference.

"I know that a government has been formed that contains some folks who don't necessarily believe in that premise, but that continues to be my premise," he said.

"That prospect seems distant now, but I think it's always important for us to keep in mind what's right and what's possible."

The coalition groups Likud, which won 30 seats in the election, with the centre-right Kulanu (10 seats), Jewish Home (eight) and two ultra-Orthodox parties: Shas (seven) and United Torah Judaism (six).

Likud members were handed portfolios during a round of bargaining with Netanyahu that lasted well into the Thursday parliamentary session.

Defence Minister Moshe Yaalon was to keep his portfolio, as was Yisrael Katz, who has served as transport minister since Likud won the 2009 election.

Katz will also receive the intelligence portfolio formerly held by Yuval Steinitz, who will become energy minister and coordinate Israel's position on Iran and its nuclear programme.

The premier will remain foreign minister and Tzipi Hotovely becomes deputy foreign minister. She has called to annex the West Bank and make Palestinians Israeli citizens.

But Gilad Erdan, the highest ranking Likud member after Netanyahu, did not receive a portfolio after refusing the premier's proposal to be internal security minister.

The new economy minister will be Arye Deri, head of the ultra-Orthodox Shas party who was imprisoned in 2000 for two years for corruption and breach of trust, felonies committed while interior minister.