Hizbullah and its allies solidified their hold on Lebanon's government Friday with the formation of a national unity Cabinet in which the opposition has veto power over government decisions. Still, the Western-backed parliamentary majority managed to deny the Hizbullah-led opposition any of the most important Cabinet positions, except for the one it had already held - foreign affairs. But it saw its own share of seats shrink as well. The Cabinet's formation ends six weeks of wrangling over how to distribute the posts and is another step toward healing the country's deep political divide. The unity government is the outcome of a deal brokered by the Arab League in May under which the opposition agreed to rejoin the government after its rivals gave in to its demands to be given a final say over all government decisions. That deal, reached during talks in Qatar's capital, came after Hizbullah members and allied gunmen fanned out across Lebanon's capital in May, clashing with government supporters. The violence killed at least 81 people and brought the country to the brink of another civil war. "We have decided to manage our disputes through democratic institutions and dialogue, and not through force and intimidation," Prime Minister Fuad Saniora told reporters at the presidential palace in suburban Beirut after names of the new Cabinet ministers were announced. "The main purpose is to serve all Lebanese citizens in these extremely difficult circumstances," Saniora said. But Lebanon's problems "will not cease to exist overnight," he said. In the new Cabinet, the parliamentary majority holds 16 seats and the opposition gets 11. Three others were distributed by the president. Last-minute concessions by the parliamentary majority cleared the way for its formation. The opposition also gave ground, dropping demands to take two of the four key ministerial portfolios: defense, interior, finance and foreign affairs. In another compromise by both sides, Saniora agreed to allow a Hizbullah-nominated politician into the Cabinet but only as a state minister. The prime minister had objected to Ali Kanso's participation in the government because militiamen from his Syrian Social National Party joined Hizbullah's Shiite supporters in overrunning Beirut's streets in May. "We have made many sacrifices. ... We accepted Kanso's participation in the Cabinet because the interest of the country and the Lebanese in this critical stage is very important for us," parliamentary majority leader Saad Hariri told reporters. In Washington, the State Department praised the creation of the new government as a critical step in restoring democracy to Lebanon but stressed that, as in the past, it would not have contact with Cabinet members who belong to Hizbullah. "We welcome the formation of this new Cabinet," spokesman Sean McCormack told reporters. "It was a long political process that has led us to this point, and it was a process that ultimately was a Lebanese one." Iran, which backs Hizbullah, also welcomed the news. Iranian Foreign Minister Manouchehr Mottaki said he hoped it would lead to a "strengthening of national unity among the Lebanese," Lebanon's National News Agency reported. The 30-member Cabinet is divided equally between Christians and Muslims according to Lebanon's sectarian political system. It includes nine holdovers from the previous Cabinet and 14 newcomers. Christian opposition leader Michel Aoun, who heads a 22-member parliamentary bloc and is a major ally of Hizbullah, had demanded the Finance Ministry in addition to four other ministerial posts. In the end, the opposition got to keep the Foreign Ministry, which will remain headed by Fawzi Salloukh. Aoun was persuaded to accept the Telecommunications Ministry in addition to four other ministerial posts. That ministry's decision to declare Hizbullah's communications network illegal triggered the May fighting. The country's new president, former army general Michel Suleiman, chose two other key posts _ the new interior minister is lawyer and human rights activist Ziad Baroud, and Elias Murr retains his post as defense minister. That takes the important Interior Ministry out of the majority's hands. The security ministry also is in charge of organizing elections, which are do to be held next in May 2009. The Finance Ministry was allotted to Mohammed Shatah, a Saniora adviser. Hizbullah, which was represented in the outgoing government by two ministers, has only one minister in this Cabinet: Mohammed Fneish was named labor minister. As in the previous government, the new Cabinet includes only one woman. Bahiya Hariri, a sister of slain former Prime Minister Rafik Hariri, was named education minister. Saniora faces many challenges, chief among them trying to unify the fractious government. He also faces the difficult task of improving Lebanon's economy, saddled with a debt of US$43 billion, or more than 180 percent of the gross domestic product - making it one of the highest in the world. "The government will work as a united team to confront all challenges," Saniora said Friday. "The Lebanese want a government that can lead them toward the future. We will put everything behind us to work as a united team."