Israeli Prime Minister Benjamin Netanyahu has handed responsibility for any future peace talks with the Palestinians to his new Interior Minister Silvan Shalom, an official said Monday.
"The prime minister has charged Silvan Shalom with conducting in his name the negotiations with the Palestinians," the official said on condition of anonymity.
Shalom, a veteran member of Netanyahu's rightwing Likud party, will also be in charge of strategic dialogue with the United States, public radio said.
The nomination was denounced by the Palestinians who said Shalom did not believe in the two-state solution.
"He does not believe in a Palestinian state. He's against a two-state solution," an official from the Palestine Liberation Organisation (PLO) told AFP, asking not to be named.
"It's not an issue of names. It's an issue of policy."
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Shalom served as foreign minister in 2003-2006, a period which covered the second Palestinian intifada and Israel's withdrawal from the Gaza Strip.
The last Israeli minister in charge of negotiations was Tzipi Livni, head of the centrist HaTnuah party, who served as justice minister until she and another minister were fired by Netanyahu in December, triggering snap elections.
The position of foreign minister is now held by Netanyahu himself after the previous incumbent, Avigdor Lieberman, bolted coalition talks at the 11th hour, relinquishing the portfolio.
Netanyahu's new government, which was sworn in late last week, marks a shift to the right by giving increased prominence to Naftali Bennett's far-right Jewish Home, which opposes a Palestinian state and strongly backs settlement activity.
The move looks likely to complicate Israel's already damaged relationship with the Palestinians and further strain ties with the international community.
Indirect US-led peace talks collapsed in April last year, with the relationship between the two sides severely strained, prompting the Palestinians to step up efforts on the international stage to seek their promised state.