President Mohammad Khatami and his cabinet met in session for the first time yesterday, marking the working start of the new administration. Earlier, the president, his vice-presidents - including Iran's first woman vice-president - and cabinet had an audience with the Iran's supreme leader, Ayatollah Ali Khamenei, who told them they should observe Islamic values.
State television reported: "Khamenei expressed his satisfaction with the start of the new government's work, hoping that with fresh strength, high morale and solidarity it will fulfil its crucial duties in the best way, leaving a good mark in Iran's history."
Ayatollah Khamenei also stressed the need to observe Islamic values, continue economic reconstruction, eradicate poverty and resist the dominance of "arrogant powers", especially in the field of "cultural invasion", it reported.
Ministers sat cross-legged on a carpet, facing the ayatollah and President Khatami, listening attentively to the speech by the successor to Ayatollah Khomeini, who led Iran's 1979 revolution.
Earlier in the day, President Khatami and his ministers visited the shrine of Khomeini to pay their respects. They arrived on a bus at the shrine at Behesht-eZahra, south of Tehran, and walked to the tomb accompanied by a military band playing music dedicated to the memory of the fundamentalist leader.
President Khatami placed flowers on the tomb, which was covered in a red cloth, and prayed for the blessing of Khomeini's soul.
After paying his respects, the president walked into a rapturous crowd and shook hands with people pressing to get his attention.
After the visit, he said that by "reinforcing Iran's economic, cultural and defence capabilities, we are seeking to build a free, independent and prosperous country which could be a role model in the world".
Mr Khatami's cabinet, which won a vote of approval in the Majlis or parliament on Wednesday, has a mandate to usher in economic and social reform to the country of 60 million.
Mr Khatami, a Shia Muslim cleric, named Ms Masoumeh Ebtekar (37), as Iran's first woman vice-president on Saturday, meeting wide expectations that he would allow women into high positions in his administration. Ms Ebtekar will also head the Environmental Protection Agency.
Mr Khatami has said an urgent priority of his government is to draw up the next state budget that will be reviewed closely by a conservative-led parliament previously reluctant to accept any cut in government spending.