TEHRAN, September 3, 2009 (AFP) - Iran's parliament on Thursday backed a cabinet proposed by President Mahmoud Ahmadinejad that includes the Islamic republic's first woman minister and a man wanted in connection with the bombing of a Jewish community center in Argentina.

The conservative-dominated assembly approved 18 of 21 nominees, propelling Ahmadinejad safely into his second four-year term after the upheaval sparked by the hardliner's disputed re-election in June.

The candidates who failed to secure the required majority of votes were two other women nominees and Ahmadinejad's pick for energy minister.

Highlighting Iran's often maverick status, nearly 80 percent of lawmakers approved Ahmad Vahidi -- wanted by Argentina as a suspect in a 1994 Buenos Aires bombing that killed 85 people and wounded 300 -- as defence minister.

After the vote, Vahidi described his selection, by much the greatest margin of any nominee, as a "decisive slap to Israel," Iran's arch-enemy.

Even as parliament speaker Ali Larijani announced his selection, MPs in the chamber shouted"Death to Israel!" -- as Vahidi supporters also did during the debate.

During Ahmadinejad’s first term the hardline president called the Holocaust a "myth."

Vahidi's appointment "represents one more provocation by Ahmadinejad," said Julio Schlosser, head of the Argentine Israelite Mutual Association, the target of the attack.

Ahmadinejad and Iran were "rewarding a person accused of committing one of the most horrendous attacks ever experienced in Argentina," he said.

The United States said Vahidi's appointment is a "step backward" for US-led efforts to end Iran's international isolation.

"Rather than taking a step forward" toward engaging the world, it is "taking a step backward by putting into high office" a man suspected of bombing a Jewish center in Argentina, the State Department's PJ Crowley said.

The first woman to join a cabinet in the Islamic republic will be Marzieh Vahid Dastjerdi at the health ministry.

A gynaecologist and former MP, Dastjerdi, 50, was approved despite never having held an executive job in government.

Dastjerdi described her selection as an "important step" for Iranian women.

"I think today women reached their long-standing dream of having a woman in the cabinet to pursue their demands," she told the parliamentary news service.

"This is an important step for women and I hold my head high."

The other two women nominees, Sousan Keshvaraz and Fatemeh Ajorlou, fell short of the required number of votes to take over the education and welfare and social security portfolios.

Oil ministry nominee Masoud Mirkazemi, set to head the crucial portfolio of OPEC's second largest exporter, barely squeaked through after being harshly criticized by a powerful conservative MP.

Thursday's vote came after five days of heated debate saw some key nominees strongly opposed but still ventually approved.

The confidence motion follows Ahmadinejad's re-election and subsequent protests that divided the nation's ruling elite and clerics in the worst political crisis in the 30 years of the Islamic republic.

Ahmadinejad rivals claimed the outcome of the vote was fraudulent, triggering massive street protests and violence in Tehran which left some 30 people dead. Opposition groups say 72 people died.

Before the vote, the embattled president appealed to parliament to approve his team.

"Some wanted to weaken the majlis (parliament) and government. But the majlis and the government will stand hand in hand and punch the enemy in its face," he said.

Mirkazemi scraped by with 147 votes, just above the 144 minimum, after being harshly criticised by prominent MP Hamid Reza Katouzian, who said he lacked experience in the oil sector, which accounts for 80 percent of Iran's foreign earnings.

Mirkazemi was nearly impeached twice during Ahmadinejad's first term over stiff hikes in the prices of basic commodities.

He ignored the criticism on Thursday and boldly outlined his plans.

"We have to remember that our oil fields are depleting and we must find sophisticated ways to utilise them," he said.

"We also need $140-billion to boost upstream projects and another $50-billion for downstream projects. We must also boost our oil production to 5.1 million barrels a day from 4.3 over the next five years."