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NETANYAHU STARTS WORK OF FORMING GOVERNMENT

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Promising to keep the peace process on track, Prime Minister-elect Benjamin Netanyahu turned Monday to negotiations that could prove equally prickly: talks with potential coalition partners.

"I spoke with (Jordanian) King Hussein and (Egyptian President Hosni) Mubarak, I told them both what I told President Clinton, that I will meet with them at the soonest opportunity, but only after we build our government," Netanyahu told legislators of his Likud Party.Radio reports said Netanyahu hoped to have the government in place by June 17, the first seating of the new parliament.

Netanyahu also said he has approached the Palestinians, who are especially nervous about his election, fearing a reversal of agreements made with the outgoing Labor government of Prime Minister Shimon Peres.

He said he asked his policy adviser, Dore Gold, to call Palestinian leader Yasser Arafat's deputy to offer reassurances.

Palestinians were pessimistic, believing the Likud would behave as it had done when it was last in power, in 1992.

"We all know that Likud will drag us into formal negotiations without making any real prog-ress," Palestinian legislator Hanan Ashrawi said.

In the sensitive government-building talks, Netanyahu already faces tensions among the contenders for ministries: religious parties traditionally get the education, interior and religion portfolios.

The parties scored 23 seats in the incoming parliament, an increase of seven, and their biggest ever showing - and were already vying for the plums.

"We have not decided yet how to divide the ministries," senior Likud member Moshe Katsav said after closing an agreement with the ultra-Orthodox Shas party.

Shas has reportedly agreed to give up the ideologically important education portfolio to the National Religious Party. But that leaves the financially powerful interior and religion ministries up for grabs.

The Likud also closed a coalition deal with the smaller ultra-Orthodox United Torah Judaism party, and were set to meet with the National Religious Party, with whom a deal seemed assured.

Netanyahu faces tensions within his own Likud party, with three logical contenders for the defense ministry - considered to be the No. 3 position in Israel, after prime minister and foreign minister.