Palestinian leader Yasser Arafat convened his new Cabinet Thursday, appointed in a step toward reforming the unwieldy and corruption-ridden Palestinian administration.

The Cabinet, trimmed from 31 ministers to 21, had its first meeting in Arafat's headquarters complex, a day after Israeli troops withdrew from the perimeter walls, ending a two-day blockade.

One by one, the ministers approached Arafat, seated at the head table, put their hands on a Quran and swore allegiance to the Palestinian Authority.

The Cabinet, appointed Sunday, was to meet Monday, but the Israeli incursion caused a postponement, Palestinian officials said.

The main difference in the new Cabinet, besides its streamlined size, is the appointment of an interior minister. Maj. Gen. Ahmed Razak Yihiyeh, who is to oversee Palestinian security forces. Up to now, Arafat has held the position himself.

Also, Salem Fayad was appointed finance minister. Fayad has broad experience in international financial circles, and his appointment is seen as an attempt to reassure international donors that the Palestinian Authority will adopt transparent accounting for aid.

Pressure on Arafat to reform his administration has come from his own people, along with Israel, the United States and Europe. Arafat has proposed cutting the number of his security forces from 12 to six, and Palestinian officials say elections for president and parliament will take place in about six months.