Socialist Chandrika Kumaratunga was sworn in Friday as prime minister and immediately began the daunting task of ending a guerrilla war that has killed 34,000 people.
Kumaratunga created a ministry of ethnic affairs to initiate a settlement with Tamil rebels, who assassinated her politician husband six years ago.Kumaratunga, 49, was tapped to become prime minister after her Peoples' Alliance became the first opposition party in 17 years to defeat the United National Party in a parliamentary election.
But her coalition government has only a slim majority in Parliament, which could make it difficult for her to fulfill a campaign goal of brokering a peace accord with the Tamil rebels.
The United National Party, which retains the presidency, had refused to talk with the guerrillas. The Alliance has pledged to remove some of the powers of the president.
On Thursday, the rebel Liberation Tigers of Tamil Eelam welcomed Kumaratunga's offer for "unconditional" talks.
"We are very happy that she is willing to talk to us. We are also willing," rebel spokesman Anton Raja said in London. The country's 3 million Tamils have been fighting for independence from the Sinhalese majority since 1983.
Alliance supporters danced and hugged each other in front of Kumaratunga's home as a motorcade took her to the presidential palace, where she was sworn in by President Dingiri Banda Wijetunga.
The United National Party oversaw a booming free-market economy but also was blamed for rampant corruption.