JERUSALEM — Taking over as Israel’s prime minister, Benjamin Netanyahu struck a somewhat conciliatory tone toward the Palestinians in an address Tuesday to Parliament, promising negotiations toward a permanent accord.

But Mr. Netanyahu, the leader of the hawkish Likud Party, stopped short of endorsing a two-state solution for the Israeli-Palestinian conflict, a potential point of friction with the United States.

President Obama has called the advancement of the two-state solution “critical.” Mr. Netanyahu opposes the idea of a sovereign Palestinian state, proposing a more limited form of self-rule instead.

Hours before he was sworn in, Mr. Netanyahu said his new government would “work toward peace on three tracks: economic, security and political.”

“We do not want to exercise our power over the Palestinians,” he said. “Under the final settlement, the Palestinians will have all the rights to govern themselves except those that endanger the security and existence of the state of Israel.”

Mr. Netanyahu said his government would seek peace with the Arab and Muslim world. He also spoke of the dangers of extremist Islam. “The biggest threat to humanity and to Israel comes from the possibility of a radical regime armed with nuclear weapons,” he said, alluding to Iran.

Mr. Netanyahu’s governing coalition is dominated by right-wing and religious parties, but it also includes the Labor Party, which represents the center-left. Mr. Netanyahu replaces Ehud Olmert, whose centrist Kadima Party will now lead the opposition.

In the 120-seat Parliament, 69 lawmakers voted for the new government late Tuesday; 45 voted against it. Five Labor members who had opposed joining the coalition abstained, and one Arab lawmaker was absent.

Mr. Netanyahu, 59, who is Israeli-born but earned a bachelor’s degree at the Massachusetts Institute of Technology, has a rich past in Israeli politics. He was prime minister from 1996 until 1999, when his government fell apart after he reluctantly forged agreements with Yasir Arafat for Israeli land transfers in the West Bank.

Ehud Barak, the leader of the Labor Party, will remain defense minister in the new government. The appointment as foreign minister of Avigdor Lieberman, an outspoken politician and the leader of the nationalist Yisrael Beiteinu Party, has alarmed many abroad. Mr. Lieberman is best known for his contentious policies — and at times insulting remarks — toward Arabs.

In Israel, however, public criticism has focused on the sheer size of the new cabinet, swelled by Mr. Netanyahu’s attempts to satisfy his coalition partners’ competing demands. With 30 ministers and at least 7 deputy ministers, the cabinet has grown into the largest in Israel’s history, prompting charges that it will prove unmanageable and constitute a waste of public funds during a recession.

In 1996, Mr. Netanyahu prided himself on his establishment of a lean cabinet, with 18 ministers. The government established by Mr. Olmert in May 2006 had 25.

In her first speech as chairwoman of the opposition, Tzipi Livni, the leader of Kadima and former foreign minister, described Mr. Netanyahu’s government as “bloated” and stuffed with “ministers of nothing.”

Of more pressing international concern is the future of the Israeli-Palestinian peace process. The result of Israel’s February elections was a marked shift to the right, injecting a degree of uncertainty over the future of this round of talks, which began at an American-sponsored conference in Annapolis, Md., in November 2007.

Mr. Netanyahu said Tuesday that his government would support a “Palestinian security apparatus that will fight terrorism” — apparently a reference to the forces being trained in an American-backed program under the Annapolis framework.

Mr. Netanyahu has so far emphasized his plans for economic development in the West Bank. His refusal to endorse the two-state solution has led to skepticism and despondency on the Palestinian side, exacerbated by fears that his government will expedite Jewish settlement expansion in the West Bank.

Khalil Shikaki, a prominent Palestinian political analyst, said economic development would not provide any guarantee against a future eruption of Palestinian violence. Briefing reporters in Jerusalem on Monday, Mr. Shikaki noted that the last two intifadas, or uprisings, broke out in 1987 and 2000 when economic conditions in the Palestinian territories were relatively good.

Palestinian politics are also complicated and in flux, with Hamas, the Islamic militant group, governing Gaza and the control of the president of the Palestinian Authority, Mahmoud Abbas, confined to the West Bank. Mr. Abbas’s mainstream Fatah movement was expected to start new reconciliation talks with Hamas in Cairo on Wednesday. A previous round ended without results.

Meanwhile, not all Israelis accept the gloomy forecasts of strained relations with Washington.

“As long as Hamas is in power in Gaza, we are off the hook,” said Efraim Inbar, a professor of political science at Bar-Ilan University. Under these circumstances, “nobody can really pressure Israel to do anything,” he said in a telephone interview.