The new government earlier won a vote of confidence from Palestinian legislators after Arafat -- who appears to have survived the Israeli-American effort to sideline him -- joined Qureia in calling for an end to three years of violence with Israel that has claimed thousands of lives.
"The time has come between us and you Israelis ... to get out of this cycle of destructive war," Arafat said, referring to the violence that broke out in September 2000 and buried an ambitious effort to end a century of Arab-Israeli enmity.
Israeli officials said they would give the new premier a chance to restore calm, and Islamic militant groups said they will consider a cease-fire. Israeli and Palestinian officials said they expected a meeting to take place soon between Qureia and Israeli Prime Minister Ariel Sharon.
The approval of the new Cabinet, which was sworn in Wednesday evening, ended a two-month Palestinian political stalemate that stymied efforts to implement the road map plan which the sides accepted six months ago.
Authored by the United States, the United Nations, the European Union and Russia, it calls for an end to violence and a Palestinian state by 2005. In the interim, Israel is to freeze settlement construction and the Palestinian security forces are to dismantle militant groups -- moves that have not been taken.
Qureia broke the standoff Sunday by giving in to Arafat on the crucial question of who controls Palestinian security and police, leaving the veteran leader effectively in charge of most of the forces.
Parliament approved the Cabinet by a vote of 48-13 with five abstentions, despite criticism within the legislature of the government's makeup. Some Palestinian lawmakers had complained that the Cabinet was too similar to previous governments that have been tainted by corruption.
Israel and the United States have accused Arafat of stoking terrorism and wanted the security agencies removed from his jurisdiction. In September, Israel issued a declaration that it would act to "remove" Arafat.
But on Wednesday there appeared to be signs of a subtle shift, with Israeli officials -- who face public pressure to find a way out of the violence -- suggesting they were primarily interested in restoring quiet.
"If the new Palestinian government is serious about pursuing peace and takes action to dismantle the infrastructure of terrorism, they will find Israel to be a real partner," said Foreign Minister Silvan Shalom.
Raanan Gissin, Sharon's spokesman, urged Qureia to bring a halt to militant attacks on Israelis and consolidate the security forces under one authority. "We're prepared to give Ahmed Qureia a grace period and judge him by the results," Gissin said.
Speaking Wednesday evening to a group of Canadian fund-raisers, Sharon did not refer directly to the new Palestinian government, but declared, "The Palestinians have come to realize that they cannot force us to surrender through violence, terrorism and incitement."
Under Qureia's predecessor, Mahmoud Abbas, the two sides reached an impasse over his rejection of Israel's demand -- backed by the road map -- that the Palestinians disarm and dismantle militant groups. Israel continued its own raids against the militants, a brief truce the militants had declared collapsed in August, and Abbas resigned in September.
Qureia, who has led a small "emergency government" since then, has said he would only use persuasion -- not force -- to bring an end to the militants' attacks.
That position seemed to augur continued deadlock, although there were signs that the sides were seeking a creative way out.
While Israel cannot agree to an explicit amnesty for terrorists, said one official, it would be willing to be more flexible with Qureia and judge him primarily by any success in enforcing an end to the attacks.
On Wednesday both the Hamas and Islamic Jihad groups -- which have staged more that 100 suicide bombings in recent years -- indicated they were considering Qureia's call to halt attacks.
Adnan Asfour, Hamas spokesman in the West Bank, said Hamas was "was ready to study any new hudna (cease-fire) offer." And Nafez Azzam, a senior Islamic Jihad leader in the Gaza Strip, said the group welcomes "any dialogue with our brothers in the Palestinian Authority" and that a truce depended on whether Israel stopped its "bloody aggression."
In exchange for quiet, said an Israeli official, who spoke on condition of anonymity, Israel would be prepared to resume implementation of the road map and ease its grip on the Palestinians -- eliminating many roadblocks, withdrawing from occupied cities, and allowing more Palestinian workers into Israel.
Some Israeli officials also now believe Israel had been too tough on Abbas -- for example, releasing only a few hundred Palestinian prisoners in July as opposed to the thousands he had hoped for.
In his speech to parliament, Qureia harshly criticized Israel's continuing clampdown -- but he also called for an immediate and comprehensive cease-fire and a quick return to peace talks on implementing the road map.
The plan does not address the specific thorny questions that helped scuttle past peace efforts -- borders, the future of Jerusalem, the fate of Palestinian refugees and Jewish settlements.
He said Palestinian security forces should be consolidated and urged Palestinian militant groups to end all violence.
"To the Israelis, we want peace and security and independence that will not be realized unless we work together," Qureia said. "Let's help each other stop this cycle of hell."
Earlier in the session, Arafat called for an end to the violence, saying Israel has a right to live in peace. In comments aimed at Israelis, he said the continued fighting "will not give you security nor give us security nor will it give you just and secure peace."
Arafat has made such statements in the past, but he now faces growing international pressure and calls among Palestinians to make concrete moves to end the bloodshed, which has killed 2,547 people on the Palestinian side and 892 on the Israeli side.
The U.N. representative to the region, Terje Roed-Larsen, said both sides must be willing to compromise. "If the parties move forward responsibly and take the leap of faith ... hope will be rebuilt and without doubt there will be broad popular support among the Palestinians and the Israelis," he said.
Meanwhile, sporadic violence continued.
In the central Gaza Strip Wednesday, an Islamic Jihad gunman fired on Israeli troops, who shot back and killed the Palestinian, military sources said.
In Nablus, a 15-year-old Palestinian who was injured Saturday in clashes with Israeli troops died of his wounds, hospital officials said.
By Mohammed Daraghmeh