Rajapakse took charge of the two key portfolios when swearing in his new 25-member cabinet in Colombo on Wednesday. Former finance minister Sarath Amunugama was appointed minister of public admin.
Reaching a permanent peace agreement with the Tamil Tigers, who want a separate homeland in the islands north and east, is crucial for Sri Lankas economy, which has expanded every quarter since the cease-fire was signed in February 2002.
Rajapakse, 60, won 50.3% of the votes in last weeks poll, defeating opposition leader Ranil Wickremesinghe. Rajapakse, of the Sri Lanka Freedom Party-led ruling coalition, was backed by outgoing president Chandrika Kumaratunga, who stepped down after two terms, and the Marxist-oriented Janatha Vimukthi Peramuna party, which opposes a separate Tamil homeland.
Ratnasiri Wickramanayake, a former Sri Lankan deputy defence minister who advocated a military solution to the islands ethnic conflict, was sworn in as PM on November 21.
Rajapakse has said he plans to present a new budget that will include pledges made before the election. He also plans to scrap an accord signed by Kumaratunga and the rebels to jointly distribute $3 bn of pledged tsunami aid. Rajapakse is a former PM and has held the labour, highways and fisheries portfolios.