The choice of the former Kadima Party leader is being seen as a sign that Netanyahu will try to revive a two-state solution after losing ground in the latest election. The announcement comes as President Obama is scheduled to visit Israel next month to discuss the peace process and other issues as part of his first trip to the country as president.
Livni, now the head of the new centrist Hatnua party, will also become justice minister, the Post reports, while her party's number three, Amir Peretz, will be head of environmental protection. She will get to appoint a special staff for the peace talks, but Netanyahu's own envoy, Yitzhak Molcho, will be a member of the negotiating team.
Peace talks have been on ice over the past three years because of disputes over Israeli settlements and the boundaries of a future Palestinian state. As a result, the Palestinian Authority has sought statehood recognition at the United Nations, sparking the outrage of Israel and the United States.