Thirteen Israelis, including three civilians, also died in the 22-day war.

Alastair Crooke, a former EU adviser on the Middle East, told Al Jazeera that the war on Gaza had probably forced the new administration to focus on the issue earlier than it probably wanted.

"I think the new administration has shown all the signs of being very cautious, the last thing they wanted was to dive into the Palestinian-Israeli conflict at the first point," he said.

Afghan focus

Obama began work at the Oval Office early on Wednesday, despite only returning to the White House at 1am after touring at least 10 of the inaugural balls being held in his honour.   

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Later he will meet members of his national security council for discussions which are expected to focus on changing the US military's emphasis from Iraq to Afghanistan.

US commanders in the two countries are expected to join the meeting by video conference. 

Obama, who as president takes up the role of US commander-in-chief, has said that he wants to remove all US combat troops from Iraq within 16 months of entering office and focus the military's efforts on the battle against the Taliban in Afghanistan.

Washington is expected to move about 30,000 more soldiers to Afghanistan as forces are withdrawn from Iraq.

The Taliban, which has fought a bloody war with US and Nato forces since being pushed from power in 2001, said that Obama, should pull his troops out of the country and let Afghans decide their own fate.

"We have no problem with Obama ... [but] he must learn lessons from Bush and before that the Soviets," Yousuf Ahmadi, a spokesman for the movement told the AFP news agency.

"We are a free nation, as they are. They have come here and they want to decide our fate for us. This is not possible. We Afghans want to decide our fate ourselves."

'Mutual respect'

The focus on foreign affairs comes after the first African-American president spoke to "all other peoples and governments who are watching" in his inauguration speech on Tuesday.

"America is a friend of each nation ... who seeks a future of peace and dignity," he said, promising "mutual respect" with the Muslim world.

The 44th president's team is still being formed but is expected to include Hillary Clinton, his former rival for the Democratic presidential nomination, as secretary of state, after a vote in congress on Wednesday.

George Mitchell, who was involved in the Israeli-Palestinian conflict under Bill Clinton, the former US president, is expected to be nominated as Obama's Middle East envoy.

Crooke said that the 75-year-old former senator, who is known for his peacemaking efforts in Northern Ireland, was "different" from other envoys.

"He is very, very patient and he is extremely good at understanding it is a choreography of building confidence that is actually the main part of building a peace process," he said.

Economic challenge

Obama's economic aides were also likely to have a busy first day as they begin the task of tackling a worsening recession and push an $825bn economic stimulus package through congress. 

But in a sign of the struggle ahead, shares in the United States and Asia slipped despite the "feel-good factor" of Obama's inauguration.

"Our test is to act with the strength, speed and care necessary to get our economy back on track, and restore America's faith in our economic future," Timothy Geithner, Obama's choice for treasury secretary, said in a statement to his Senate confirmation hearing.

He also apologised to Congress for his "unintentional" mistake in failing to pay $34,000 in income taxes.

"I should have been more careful. I have gone back and corrected these errors and paid what I owed," he said.

Before beginning work on Wednesday, Obama and his family attended a prayer service at Washington's National Cathedral.