Prime Minister Ariel Sharon, whose tough approach toward Palestinian violence was strongly backed by Israeli voters in his landslide reelection last month, formed a new government coalition today that leans heavily on nationalist parties that oppose a Palestinian state and favor expanding Jewish settlements.

The political makeup of the coalition, which gives Sharon 68 of the parliament's 120 seats, seemed to dim prospects for any early resumption of peace negotiations with the Palestinians aimed at ending the uprising that has been grinding away since September 2000 with a loss of about 2,000 Palestinian and 700 Israeli lives.

Sharon had said he wanted a broad-based national unity government as Israel confronts the Palestinian uprising and danger raised by a possible U.S. attack on Iraq. But the Labor Party, the second-largest in parliament, spurned Sharon's offer to join the government, leading him to make pacts with three other parties.

"Once Sharon gave up on the Labor Party, he gave up on the peace process for the near future," said Gadi Wolsfeld, a political scientist at Hebrew University in Jerusalem. "I think what Sharon learned in the last 20 years is how to talk in a way that pleases the Israeli center and the American administration, yet continue with the same policy."

Sharon sent a letter to President Moshe Katsav announcing that he had formed a government, which was expected to be sworn in Thursday. In addition to Sharon's Likud Party, with 40 seats, the coalition embraces the secular Shinui Party, with 15 seats; the pro-settlement National Religious Party, with six seats; and the ultranationalist National Union party, with seven seats.

Thirteen of the 68 seats thus belong to a pair of parties that adamantly oppose an independent Palestinian state and are longtime champions of expanding Jewish settlements in the West Bank and Gaza Strip, two issues that have fueled the uprising.

Foreign diplomats have said that creating a Palestinian state, stopping settlement expansion and eventually vacating existing settlements would be elements in any cease-fire and negotiated peace deal. They are part of a U.S.-sponsored peace plan, called the "road map," that Sharon has pledged to support, although with many changes. The plan is being pushed by a group known as the Quartet, comprising the United States, Russia, the European Union and the United Nations, but it has been languishing for months.

"It looks like it's a right-wing government, not a government that's willing to seriously tackle issues like settlements and meeting the Palestinians halfway," said a diplomat from a Quartet nation.

Saeb Erekat, the Palestinian Authority's chief negotiator with the Israelis, said, "It's a settlers' government. It means we don't have a road map, we don't have a peace process. We will have a lot of settlement expansion and land confiscation and Israeli military activity."

A senior official close to Sharon who asked not to be identified said the new government would be well suited to tackle what he described as Israel's "most pressing issue, the economy." But at the same time, he said, "There are great hopes for the political process" to end the conflict with the Palestinians.

In forging a coalition, Sharon had to negotiate with other parties and their leaders over cabinet positions. Foreign Minister Binyamin Netanyahu, who challenged Sharon for the Likud Party's leadership in a primary last year, will be replaced by the current finance minister, Silvan Shalom.

Netanyahu had said that he would not serve in any other post, but he reportedly was considering Sharon's offer to become finance minister. Former chief of staff Shaul Mofaz remained as defense minister.

Prime Minister Sharon, left, sat with Finance Minster Silvan Shalom at a recent party conference. Shalom will replace Binyamin Netanyahu, standing, as foreign minister.