The Israeli Parliament, the Knesset, on Tuesday approved the right-leaning coalition cabinet led by Likud party chief Benjamin Netanyahu in a 69 to 45 vote after a six-hour debate.

Netanyahu assumed office of the Prime Minister after a marathon session that ended well past midnight on Tuesday. This will be Netanyahu's second term as prime minister, having already served as Israel's Prime Minister in 1999.

Addressing the Knesset ahead of the vote on the formation of a new coalition cabinet, Netanyahu assured that under his leadership Israel would continue to work towards a comprehensive peace with the Arab and Muslim world.

He also named 30 new ministers and deputy ministers of his cabinet, the largest in Israeli history. In his efforts to form a coalition government, Netanyahu was forced to allot main portfolios of his cabinet to leaders of the coalition partners.

Avigdor Lieberman, leader of the ultra-nationalist Israel Beiteinu party, was named the foreign minister, while Labor Party chief Ehud Barak was given charge of defense.

Outlining the goals of his incoming cabinet, Netanyahu said radical regimes are threat to Israel, and the world as a whole. The hawkish rightist leader appealed to the Knesset to rally behind his government during the country's unprecedented time of crisis.

Israel finds itself facing two enormous challenges: an economic challenge, and a security challenge. These two crises have come at a time of great international change, he said.

Earlier, outgoing Prime Minister Ehud Olmert in his final speech in the parliament before Netanyahu's address, urged the new administration to make the peace process a priority.

In his speech, Olmert defended his government's decision to carry out the 2006 war in Lebanon and the recent operation in the Gaza Strip.

Olmert said he was proud of his government's many achievements and not in the least bit resentful as he leaves office. He said that he had acted for the nation and the people by the best of my judgment, adding that his conscience was clear.

Olmert was heavily criticized throughout his tenure as the country's prime minister for the wars with the Hezbollah in Lebanon and the recent offensive against the Hamas militants in the Gaza.

He has also been in the center of various corruption allegations throughout his three-decade long political career, but has never been convicted in any of them. He is currently under investigation for claiming extra expenses on trips abroad, unlawfully accepting cash from a U.S. businessman and for corrupt political appointments.

Though Olmert resigned as Prime Minister in September following pressure from within the ruling coalition over corruption allegations against him, he was asked to remain as acting prime minister until his designated successor, Likud leader Benjamin Netanyahu, formed a new coalition government.

Former Israeli Foreign Minister Tzipi Livni is now leading Olmert's Kadima party, which secured the most number of seats in the February elections. Livni, who is now in the opposition despite being the leader of the largest party in the parliament, alleged that the Netanyahu government comprised of ministers in charge of nothing.

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