New Palestinian government approved
Palestinian prime minister vows free elections in June
Palestinian Prime Minister Ahmed Qorei faces Arafat during his government's swearing in ceremony.
RAMALLAH, West Bank (CNN) -- The Palestinian Legislative Council on Wednesday approved a new 24-minister government presented by Prime Minister Ahmed Qorei.
Before the vote, in an address to the council, Qorei called on Israel to withdraw from the Palestinian territories and vowed to hold "free elections next June." Arafat told the council he recognizes the state of Israel and its "right to live peacefully."
Arafat and Qorei's agreement on the makeup of the Cabinet marked the end of a bitter dispute over control of security forces. Qorei had threatened to quit when Arafat would not approve his choice of interior minister, a position that includes control over security.
The resolution agreement calls for Arafat loyalist Hakam Balawi to become the Cabinet's new interior minister. In the new government, Balawi will mainly be responsible for nonsecurity, administrative aspects of the interior ministry.
Security powers will be transferred to the National Security Council, headed by Arafat. Balawi, Qorei, the finance minister and heads of security agencies will also be members of the council. Commander of Palestinian security forces Nasser Yusef -- Qorei's initial candidate for interior minister -- will not be a member of the Cabinet.
For months, Israel and the United States have called on the Palestinian Authority to use its security forces to rein in Palestinian militant groups and persuade them to stop their terrorist attacks on Israelis.
Israel: 'We are willing to give him a chance'
Ra'anan Gissin, a senior adviser to Israeli Prime Minister Ariel Sharon, said Israel is looking for a peace partner and hopes Qorei can be more effective than the previous Palestinian prime minister, Mahmoud Abbas, who resigned after a similar power struggle with Arafat about security issues.
"We are willing to give him [Qorei] a chance to do what is right," Gissin said.
"I think he's a very clever man. He has the capability of trying to muster consensus and support and knows Mr. Arafat as well."
Gissin also said Israel will do its part "to do more in terms of easing restrictions."
"We have no intention whatsoever of seeing the collapse of the Palestinian Authority and the services it provides for the poor Palestinian people," Gissin said. "We have no war against the Palestinian people. We want to see them return to normal lives. We want to see those who are not involved in terrorist activity being able to live normal lives."
Chief Palestinian negotiator Saeb Erakat, who also will be a minister in the new government, welcomed the agreement.
"I'm glad that we have the Cabinet formation behind us now so we can concentrate on the real issues of trying to revive the peace process and continue the reform program," Erakat said.
Qorei has been serving as acting prime minister since early October when Arafat named an emergency Cabinet to replace Abbas' government.
A swearing-in ceremony at the council headquarters will be held in Ramallah, West Bank.
Arafat to Israel: 'We want dialogue'
In his address to the council, Arafat also called for an end to Israeli-Palestinian violence.
"We want dialogue instead of the military means and violence and destruction," he said.
A U..S.-backed "road map" peace plan -- also sponsored by Russia, the United Nations and the European Union -- calls for steps on both sides aimed at ending the Israeli-Palestinian conflict and establishing an independent Palestinian state by 2005.
Abbas quit on September 6, after Arafat kept control of much of the security apparatus, including the uniformed Palestinian police. He had served for four months.
In his resignation announcement, Abbas blamed "Israel's unwillingness to implement its 'road map' commitments and to undertake any constructive measures" in an effort to reach peace.
Abbas also said the United States and international community "did not exert sufficient influence on Israel to implement its commitments in the road map to push the peace process forward or to end its military escalation."
CNN's Sausan Ghosheh and Fionnuala Sweeney contributed to this report.