The decision was announced by the new Prime Minister-designate, Yitzhak Rabin, who presented his cabinet to the country before his government formally takes over today.
There had been some question over whether Mr Peres would accept the Foreign Ministry post because Mr Rabin had sought to remove the ministry's power over talks on Palestinian autonomy. Mr Peres has long advocated early peace with the Arabs and is expected to be prepared to compromise further than Mr Rabin.
Language has been agreed that suggests Mr Peres will be able to exercise his influence in the talks, albeit under the overall control of Mr Rabin.
With several other figures favouring negotiation in cabinet posts, Mr Rabin has formed a government that is further to the left than expected.
Mr Rabin will keep the defence portfolio for himself. The job of housing minister - crucial to the peace process - goes to the architect of Mr Rabin's election campaign, Binyamin Ben-Eliezer and the job of health minister to the conciliatory Chaim Ramon.Reuse content