Jerusalem - Setting the stage for a possible showdown with the United States and the European Union, new Israel Foreign Minister Avigdor Lieberman said Wednesday that Israel was not bound by the internationally-endorsed Annapolis peace process.

Instead, Lieberman said in a speech at the foreign ministry as he assumed his ministerial duties that Israel would be bound by the 2003, performance-based "road map" of the quartet of the US, EU, Russia and United Nations.

He spoke shortly after new Israeli Prime Minister Benjamin Netanyahu was formally handed the reins of government, at a festive ceremony in Jerusalem during which departing premier Ehud Olmert urged him to continue the peace process he had revived at the November 2007 summit in the Maryland capital.

President Shimon Peres too urged the Netanyahu government to adopt "the vision of two states for two peoples," as did the US State Department and a host of world leaders, from Quartet envoy Tony Blair, German Chancellor Angela Merkel and EU's external affairs commissioner Benita Ferrero-Waldner to UN Secretary General Ban Ki- moon.

Both the Annapolis process and the road map endorse the two-state solution and call for the establishment of an independent Palestinian state.

But while the Annapolis process calls for immediate negotiations on all of the core issues of the Israeli-Palestinian conflicts, including Jerusalem, borders and refugees, the road map calls on the Palestinians to first combat militants.

The road map also calls on Israel to freeze all settlement activity and to uproot dozens of settlers' outposts erected without formal government approval throughout the West Bank over the past eight years.

The Annapolis conference was attended by 40 countries, including leading Arab states, and revived negotiations on a final peace deal for the first time after seven years of violence. They were broken off when Israel began an election campaign last year.

Lieberman noted that the Israeli government and parliament had never ratified the statement from the Annapolis conference.

"There is one document which commits us - and it is not the Annapolis summit. It has no validity whatsoever," he said.

Referring to the road map, he added: "We will never agree to jump over all the clauses and go to the last one, which is negotiations over a final status agreement."

"Whoever thinks that through concessions, and by saying everyday 'I'm willing to make concessions. I'm willing to make concessions. Peace Peace,' he will bring something - No, he will only bring on himself pressure and more and more wars.

"Si vis pacem, para bellum. If you want peace, prepare for war, be strong," he stated.

Israel's Channel 10 television and other media quoted several Israeli diplomats and foreign ministry officials as saying they were "shocked" by the blunt Lieberman speech, with one of them saying he had managed to turn his positive message of accepting the road map, on which world consensus existed, into a negative one.

Lieberman, leader of the ultra-nationalist Yisrael Beteinu party, was a controversial choice for the foreign ministry, given his hardline views and blunt language.

It was not immediately clear whether his speech reflected government policy, but Netanyahu has in the past also rejected the Annapolis process.

Introducing his government to the Knesset Tuesday, Netanyahu nevertheless said Israel would continue negotiations and pursue a peace deal, but stopped short of openly mentioning the creation of a Palestinian state.

"There is no other path for the state of Israel, other than striving for peace," outgoing premier Ehud Olmert told Netanyahu during the official handover ceremony in Jerusalem Wednesday morning.

"I am ending my task with a sense of pride and satisfaction," an at times visibly emotional Olmert said.

"But one thing I didn't get to do. I didn't get to realize my dream of arriving at real peace with our neighbours," he added.

Palestinian President Mahmoud Abbas, reacting to the new government Tuesday, reiterated the Netanyahu government "should accept the two-state solution so that we can resume talks with it."

Netanyahu and his government were sworn in late Tuesday, after 69 of the Knesset's 120 lawmakers voted confidence in it. Another 45 voted against, while the remaining six abstained, including five Labour Party members who vehemently opposed their leader Ehud Barak's decision to join the Netanyahu coalition.

An Arab-Israeli legislator, Ahmed Tibi, also stayed away from the swearing-in as a protest against the right-leaning government.

With as many as 30 ministers and nine deputies, the cabinet is the largest and most expensive in Israeli history.

Sworn in seven weeks after elections, it is the result of lengthy coalition negotiations.

Apart from Labour, the coalition includes only hardline, ultra-nationalist and ultra-Orthodox religious factions.

The last faction to join did so only on Wednesday morning. The deal with the five-seat, ultra-Orthodox United Torah Judaism party was signed after last-minute differences were resolved, and brings to 74 the number of legislators who support the government.

Lieberman also told reporters after the ceremony: "No withdrawal from the Golan whatsoever. Not during my term."

Blair said after a meeting with European Union officials in Brussels that the next six months would be "critical" for the Middle East peace process and that "if there is no significant progress in 2009, we face a situation of great jeopardy for the peace process." (dpa)