The last official ceremony honoring the new government featured President Shimon Peres starting Prime Minister Binyamin Netanyahu off on his left leg with a challenge to accept the Saudi Initiative and free Gilad Shalit. The ceremony was held at the President's Residence in Jerusalem. Peres, Netanyahu and outgoing Prime Minister Ehud Olmert spoke. In a short and emotional speech, the Prime Minister praised the Jewish People and his wife Sarah. Both Peres and Netanyahu thanked Olmert for his work, without mentioning the criminal investigations against him that led to the premature end of his government. Peres implied that Netanyahu should accept the Saudi Initiative, which requires Israel's full withdrawal from all of Judea, Samaria and greater Jerusalem. Peres implied that Netanyahu should accept the Saudi Initiative, which requires Israel's full withdrawal from all of Judea, Samaria and greater Jerusalem. Netanyahu, who was sworn in as Israel’s Prime Minister late Tuesday night – his second term in office, after having served from 1996 until 1999 – thanked Peres for his help in the coalition-forming process. “I appreciate your experience, and I am likely to need your help in the coming years as well,” Netanyahu said. He noted his decades-long acquaintance with new coalition partner Ehud Barak: “We know each other for many years, ever since we were both young” – they served together in the IDF’s elite Sayeret Matkal unit – “and I know that at my side is a talented man who knows how to analyze. I am sure that we will work well together.” The new Prime Minister said that Israel faces many difficult challenges, but that leading the list are the economic and security issues. “We will have to get to work on them the minute we leave this building,” he said. Netanyahu thanked his wife Sarah at length for her "wise counsel" and for always reminding him to help those in need. He concluded, “The Jews are an ancient nation, one of the oldest on earth. Most of the nations that were around [long ago] are no longer; they deteriorated and disappeared. Am Yisrael [the Jewish Nation] refuses to accept these iron laws of history. With wondrous powers, we have received another chance, but we have no other State. We will preserve it, and with G-d’s help, it will preserve us.” Peres Praises Olmert President Peres praised Olmert, noting that his “three-and-a-quarter years in office… were characterized by difficult security decisions that yielded important strategic results – some of which can still not be spoken about.” Peres praised Olmert’s development of good relations with many world leaders, his persistence in talking with the Palestinian Authority, his opening peace feelers with Syria, his “stable leadership and strong character,” and more. Turning to Netanyahu, Peres praised him for forming a broad-based government with Labor, and noted that Israel’s democracy is to be admired for having withstood premature government changes in the past. He said that Netanyahu has a “moral obligation to preserve the work force and prevent layoffs, even during this period of heavy international financial crisis.” President Lists Off Netanyahu's Missions Peres listed other challenges for Netanyahu: “Responsible management of the national economy, concern for the underprivileged, renewal of the research-and-development momentum, broadening infrastructures and developing the regional economy [with the neighboring Arab countries – ed.], making education and social and cultural values a central effort; concluding the forming of a constitution; stabilizing the relationship between the three branches of government; the fight against organized and other crime; and above all – preserving Israel’s security in light of the threat from the axis of evil and terrorism, and forming an international front to stop Iran’s nuclearization.” “Israel is the only country in the world that must fight cruel underground terrorism that forcibly took over the Gaza Strip after toppling the legitimate regime of the Palestinian Authority," Peres said. "Gaza is under occupation – not by Israel, but by Hamas, which embitters the lives of its residents. Together with strengthening Israel’s security, your government must make a supreme effort to advance the peace process on all fronts.” Peres Hints: Withdraw from Judea/Samaria, Accept Two States, Bring Shalit Home Chiding Netanyahu from the left, Peres said, “The outgoing government adopted the vision of ‘two states for two peoples’ that was initiated by the American administration and adopted by most of the world’s countries. And it will be upon your government to determine the face of the coming reality.” “An Arab [Saudi – ed.] initiative for regional peace has been publicized. And I don’t know any better alternative than peace for the entire region…” “Another mission you have,” Peres told Netanyahu, “is that of the release of Gilad Shalit and his return very soon to his warm family and nation that are waiting for him.” The Olmert government was willing to meet many Hamas demands - including the release of hundreds of prisoners, among them many murderers – in exchange for Shalit’s freedom. In the end, however, it decided that the demanded price was even higher than the large cost it was willing to pay. Olmert: No Bitterness Olmert, for his part, said, “I merited many things during my term in office, but one thing I did not merit – to fulfill the dream of reaching real peace with our neighbors. I hope the new government will merit completing these negotiations, because there is no other way.” Olmert began his political career as a hawkish Likudnik, but has become a strong proponent of “land for peace.” He said last week that he had made the most generous offer ever made to the PA – apparently involving Israel’s withdrawal from 93% of Judea and Samaria, and the eviction of 60,000 Jews from their homes, to make way for an Arab state west of the Jordan River – but that PA leader Mahmoud Abbas had not accepted it. “I made mistakes,” Olmert said, “but whatever I did was with great love and good intentions… I have no bitterness or anger towards anyone.” Three police investigations - the Talansky envelopes, the investment center, and RishonTours - are still underway against the outgoing premier.