Israeli environment minister Avi Gabbay announced his resignation on Friday, saying the appointment of a hardliner Avigdor Lieberman as defense minister had created an "extremist government".

Israeli environment minister Avi Gabbay announced his resignation on Friday, saying the appointment of a hardliner Avigdor Lieberman as defense minister had created an "extremist government".

Gabbay said that he was "unable to swallow" Prime Minister Benjamin Netanyahu's decision to take the defense portfolio from former general Moshe Yaalon and hand it to Lieberman, who has pledged harsh measures against Palestinians.

Yaalon resigned from the government a week ago in protest, warning of a rising tide of extremism in the party and the country as a whole.

"I could not accept the removal of Yaalon, a professional defense minister," Gabbay said.

"The country has the right to have a rightwing government," he added. "But I do not think it is right to form an extremist government.

"Recent political events and the changing of the defense minister are to me grave events which ignore what is important to state security and will cause further extremism in society."

Gabbay, of the centre-right Kulanu party, is not a member of parliament and his resignation does not affect the ruling rightwing coalition's majority.

Co-opting Lieberman and his Yisrael Beitenu party will add five lawmakers to Netanyahu's previously wafer-thin majority if the coalition deal is given parliamentary approval next week as expected.

The United States has said that the new coalition raises "legitimate questions" about the Netanyahu government's commitment to a two-state solution with the Palestinians.

US State Department spokesman Mark Toner, in a rare comment on Israeli internal politics, said Wednesday that Washington had "seen reports from Israel describing it as the most right-wing coalition in Israel's history".

"And we also know that many of its ministers have said they oppose a two-state solution," he said.