The forty-six-year-old Benjamin Netanyahu forms a government…

The forty-six-year-old Benjamin Netanyahu forms a government on June 18 and thus becomes the youngest person ever to serve as Israel's prime minister and the first born after the founding of the state.

He creates for Sharon the cabinet post of minister of national infrastructure.

Netanyahu, whose central election slogan had been "peace with security," with the emphasis on security, promises that he will be tougher on Arafat than Peres has been.

The consternation his promise of a tougher line causes on the Palestinian side is compounded by his refusal to meet Arafat face to face and by the severe economic hardship caused by the ongoing internal closure, which has prevented thousands of Palestinians from going to their jobs in Israel.

Unrest dominates Netanyahu's prime ministership.

Soon after he enters office, relations with Syria deteriorate, and Syrian troop movement in Lebanon raises the possibility of war as border skirmishes increase.

There is also tension with Jordan and Egypt.