JERUSALEM (Reuters) – Israel appointed its first Muslim cabinet minister on Sunday, a step he said would help its Arab citizens identify more strongly with the Jewish state.

“The first step has been taken and this has given Israeli Arabs a feeling of belonging,” Galeb Magadla told Army Radio after the cabinet ratified his appointment as a minister without portfolio.

Arabs make up about 20 percent of Israel’s population and have long complained of being treated like second-class citizens and about a paucity of government funds for their towns and villages.

Israeli officials have denied any policy of discrimination against the country’s Arab citizens, saying they enjoyed more political freedom in Israel than in anywhere in the Muslim world and had a strong representation in parliament.

Magadla was nominated by the Labour Party for a ministerial post after one of its members quit the cabinet in protest at the addition of the ultranationalist Yisrael Beitenu faction to the Prime Minister Ehud Olmert’s coalition government in October.

“I see this as a historic and important step toward equality and promoting peace in the region,” Amir Peretz, Israel’s defense minister and Labour Party chief, said at the cabinet meeting, according to YNet news Web site.

YNet said Strategic Affairs Minister Avigdor Lieberman of Yisrael Beitenu was the only cabinet member to vote against the appointment.

In 2001, an Israeli Druze became the first non-Jewish member of the cabinet, serving as a minister without portfolio.

Israeli political sources said Magadla’s appointment could be the opening move in a possible cabinet reshuffle in the coming week.

The shakeup, the sources said, could enable Olmert to offer a variety of posts to coalition partners in return for their support of Vice Prime Minister Shimon Peres’s bid to become Israel’s next president.

Peres, a member of Olmert’s centrist Kadima party, has said he wants to replace President Moshe Katsav, suspected of rape and other sexual assaults against female employees.

Katsav, who has denied any wrongdoing, began a three-month leave of absence last week after Israel’s attorney-general announced he had drafted an indictment against him. Katsav has said he would quit the ceremonial post if formally charged.

Parliament would then vote for a new president.