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Zimbabwean President Robert Mugabe swore in his longtime rival Morgan Tsvangirai as prime minister Wednesday, ushering in a unity government in an extraordinary concession after nearly three decades of virtually unchallenged rule.

There had been pressure for Mugabe — who remains president in the coalition — to step down altogether, and questions remain about whether a partnership can work after a long history of state-sponsored violence against Tsvangirai and his supporters.

Mugabe, who recently declared "Zimbabwe is mine," went further Wednesday than many would have expected. He stood to face Tsvangirai as an equal in a white tent on the grounds of the presidential palace.

Regional leaders watched from the tent and Zimbabweans across the country watched on state TV as Tsvangirai raised his right hand and declared: "I will well and truly serve Zimbabwe in the office of prime minister of the Republic of Zimbabwe, so help me God."

Both Tsvangirai and Mugabe were relaxed and smiling during the brief ceremony, which also included the swearing-in of Tsvangirai's deputies, Arthur Mutambara of a breakaway opposition party and Thokozani Khupe of Tsvangirai's party.

Ian Stephens, a Harare businessman, said it was too early to celebrate the new government.

"It depends on how cooperative Mugabe is and whether he can be trusted," Stephens said. But "Mugabe no longer has absolute power and that could be the turning point."

The country's economic collapse — for which Tsvangirai holds Mugabe responsible — has led to the world's highest inflation rate, left millions dependent on international food aid, and caused a cholera outbreak that has killed some 3,400 people since August.

Sampson Ibrahim, a street vendor, was in a crowd watching the broadcast on a TV in the window of an electronics store in downtown Harare.

"I am happy because I expect prices to go down," Ibrahim said. "They've got to get the schools and the hospitals working again."

Neighboring leaders who pushed for the coalition said that once the two men had joined in the unity government, they would overcome mutual mistrust and work together for the good of their country.

Mugabe and Tsvangirai have clashed repeatedly since the decade-old opposition Movement for Democratic Change emerged as the most serious threat to the ruling regime since independence.

Tsvangirai has been beaten and jailed by Mugabe's security forces. In 2007, police attacked him after he held an opposition meeting the government had banned. Images shown on news broadcasts around the world of his bruised and bloodied face came to symbolize the challenges his movement faced.

Mugabe, who turns 85 on Feb. 21 and has been in power since independence from Britain in 1980, has in the recent past treated the 56-year-old Tsvangirai as a junior partner at best, often not bothering to hide his contempt.

Tsvangirai won the most votes in the first round of presidential election held almost a year ago, and withdrew from a June runoff only because of attacks on his supporters.

Tsvangirai's party, the Movement for Democratic Change, also broke ZANU-PF's lock on parliament in March 2008 elections for the first time since independence.

A power-sharing deal was reached in September but remained deadlocked for months over how to divide Cabinet posts. Tsvangirai gave in on Jan. 30, agreeing to join the government now and resolve outstanding issues later.

The coalition agreement calls for the government to make its priority reviving the economy. Even if the factions can put aside their differences, they cannot do much without foreign help. The world's main donor, the United States, has made clear the money won't flow if Mugabe tries to sideline Tsvangirai.

The president of neighboring South Africa, Kgalema Motlanthe, told Parliament on Tuesday that the swearing in "is a vindication that our approach to the crisis of Zimbabwe all along has been correctly, despite skepticism in certain quarters." Motlanthe called on the international community to lift sanctions on Zimbabwe and turn its attention now to Zimbabwe's humanitarian crisis.

In Brussels on Wednesday, EU Development Commissioner Louis Michel urged Zimbabwe's new unity government to "work without delay" to improve their people's desperate situation. The EU still has in place a visa and assets freeze meant to isolate Mugabe and his supporters.

Former South African President Thabo Mbeki, who mediated the unity deal, had stuck to a strategy of quiet diplomacy on Zimbabwe for years despite criticism that the approach amounted to appeasing Mugabe.

The unity government's agenda includes preparing for new elections, expected in a year or two. Media restrictions will have to be lifted and other steps taken to ensure the elections are free and fair, after several ballots marred by violence, intimidation and manipulation blamed on Mugabe's party.

Tsvangirai on Tuesday called for political detainees to be released before he was sworn in as prime minister, but did not say what he would do if they were not. Human rights groups say tortured detainees are on the verge of dying in jail.

Some Tsvangirai allies say he never should have agreed to serve as prime minister in a government that left Mugabe president. Mugabe, meanwhile, has been under pressure from aides in the military and government who do not want to give up power and prestige to the opposition.

Unusually for a state occasion, no military chiefs were at Wednesday's ceremony. Generals in the past have said they would not salute Tsvangirai, a former labor leader who did not take part in the independence war that swept Mugabe to power in 1980.

Elphas Mukonoweshoro, an opposition leader who was to take the oath of minister of public service when the rest of the Cabinet is sworn in Friday, described said the absence of the military chiefs not as a snub, but an effort "to reflect the new Zimbabwe."

Mugabe's regime had been described by some as close to a military government, with generals and revolutionary war veterans holding high government and political posts.