JERUSALEM (AP) âÄî Israel’s incoming Prime Minister Benjamin Netanyahu struck a conciliatory tone as he took office Tuesday, promising to seek a “permanent arrangement” with the Palestinians and full peace with the entire Arab and Muslim world. However, he did not explicitly endorse an independent Palestinian state âÄî a key goal of the U.S. and the international community. “We do not wish to rule another people. We do not want to rule the Palestinians,” he declared in a speech to parliament shortly before he was to be sworn into office. The leader of the hawkish Likud Party had raised concerns in Washington and the European Union during his election campaign by hinting he would end peace efforts with the Palestinians and promising to expand Jewish settlements in the West Bank. His appointment of an ultranationalist politician, Avigdor Lieberman, as foreign minister also has drawn international criticism. But since Netanyahu was asked to form a government last month, he has softened his campaign rhetoric in an attempt to build a broad, centrist coalition and ease international concerns about his agenda. Last week, he persuaded the moderate Labor Party to join and promised to continue peace talks with the Palestinians. In his speech, Netanyahu praised Islam. “The Islamic culture is great and rich, with many branches in our people’s history which has known periods which flourished for Arabs and Jews who lived together and created together.” But he warned that “radical Islam is trying to eradicate us,” noting that Israel is battling militant Islamic groups on its northern and southern borders. He said that Iran, which backs the militants, is a major threat to regional security and urged the world to prevent Tehran from developing nuclear weapons. “We are determined to block terrorism in every direction and fight it until the end,” he said. But he also stressed that he does not seek hostilities with the Muslim world. “Israel has always, and today more than ever, strives to reach full peace with the entire Arab and Muslim world, and today that yearning is supported by a joint interest of Israel and the Arab states against the fanatical obstacle that threatens us all,” he said. He called on the Palestinians to “fight terror” and said he would pursue a final peace deal with them. “Under the permanent status agreement, the Palestinians will have all the authority necessary to rule themselves,” he said. But he did not elaborate, drawing calls from the Palestinians to firmly commit to give them independence. “The only way the Palestinians can rule themselves by themselves is through ending the Israeli occupation that began in 1967 and establishing an independent Palestinian state with east Jerusalem as its capital that will live side by side in peace and security with the state of Israel,” said Palestinian negotiator Saeb Erekat. Netanyahu’s speech was frequently interrupted by heckling from opposition lawmakers, particularly as he introduced the members of his Cabinet. He paused before announcing the appointment of Lieberman as his foreign minister. Lieberman, leader of the ultranationalist Yisrael Beitenu Party, drew widespread accusations of racism with a proposal for a loyalty test to the Jewish state. The proposal was widely seen as baiting Israel’s Arab minority. Later Tuesday, the Knesset, or parliament, was swearing in Netanyahu and his 28 ministers at a special session. Netanyahu is succeeding Ehud Olmert, who was forced from office by multiple corruption investigations. In a farewell address, Olmert gave an emotional defense of his three-year tenure. He said wars in Lebanon and Gaza under his watch dealt heavy blows to Israel’s enemies, and he feverishly sought peace with the Palestinians. “I accept with love the criticism of the government. I am proud of the government’s achievements, which are many, and I am sorry for my mistakes and they are not few,” he said. The new Cabinet is an unwieldy and heterogeneous group hailing from ultra-Orthodox parties, a hard-line religious party, a hawkish secular faction, and the centrist Labor Party, along with Netanyahu’s Likud. To placate his new partners and his allies, Netanyahu created new ministerial positions âÄî so many that parliament carpenters had to work overnight to enlarge the Cabinet’s table. Addressing parliament, opposition leader Tzipi Livni criticized the size of the government and urged Netanyahu to pursue a moderate agenda. “I am full of hope you will reach a peace agreement,” said Livni, foreign minister in the outgoing government. It was a Likud prime minister, Menachem Begin, who signed Israel’s historic peace accord with Egypt, and another Likud prime minister, Ariel Sharon, who pulled Israeli settlers and troops out of Gaza unilaterally in 2005. After criticizing peace talks during the campaign, Netanyahu has now embraced them, though without saying he supports the creation of a Palestinian state. Hamas, the Islamic group that took control of Gaza in 2007 and which remains officially dedicated to Israel’s destruction, has said it sees no difference between Israeli governments. But Fawzi Barhoum, a Hamas spokesman, said Tuesday that the new government will increase risks for Palestinians and the region. “This racist and extreme government will lead the region from bad to worse,” he said.