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Mr Gilani, a senior member of the party of slain opposition icon Benazir Bhutto, was elected as premier on Monday by parliament, where an anti-Musharraf coalition won a majority in elections a month ago Supporters chanted 'Long Live Bhutto' after Mr Gilani, dressed in a black traditional sherwani outfit, finished repeating the oath read out by a grim-faced Musharraf in a ceremony at the presidential palace.
There were no speeches by Mr Musharraf or Mr Gilani, who spent five years in jail under Mr Musharraf's government on corruption charges that he says were politically motivated.
The ceremony came as US Deputy Secretary of State John Negroponte and Assistant Secretary of State Richard Boucher arrived in Pakistan for talks with Mr Musharraf, Mr Gilani and former premier Nawaz Sharif, officials said.
Washington has staunchly backed Mr Musharraf, a former general who seized power in a coup in 1999, ever since he backed the US-led invasion of Afghanistan following the 9/11 attacks on the United States.
Analysts say the US administration is now desperate to woo the new coalition government despite its hostility to Mr Musharraf, partly relying on the fact that Ms Bhutto was a pro-Western enemy of Islamic extremists.
Details of the talks were not immediately available.
Ms Bhutto was assassinated in December in one of a wave of suicide attacks that has rocked Pakistan over the last year. The government has blamed Al-Qaeda but Gilani is seeking a UN investigation into her death.
But there were jitters in US circles after a New York Times report at the weekend said that Ms Bhutto's widower Asif Ali Zardari and Mr Sharif intend to start negotiations with Islamic militants in the hope of ending the recent violence.
'They (the US envoys) would like to reassure the new government of America's continued support and establish their contact with the new power structure in the frontline state in the ?war against terrorism,' analyst and former general Talat Masood said.
Western allies are also anxious about the wider stability of the nuclear-armed nation, with all eyes on how strongly Gilani and the coalition government will confront Mr Musharraf.
Minutes after being elected on Monday, Mr Gilani ordered the release of the chief justice and other judges who have been held since Mr Musharraf sacked them under a state of emergency in November.
Deposed chief justice Iftikhar Muhammad Chaudhry was meeting lawyers and well-wishers on Tuesday, after finally emerging from four months of house arrest the previous night to wave to ecstatic supporters.
The coalition, led by Mr Bhutto's Pakistan People's Party and including Sharif's party and two smaller groupings, has vowed within 30 days to pass legislation reinstating the sacked judges.
Mr Musharraf sacked the judges when it looked like the Supreme Court might overturn his October re-election as president. If the judges are reinstated, they could rule his re-election illegal.
Mr Musharraf on Sunday pledged his full support to the new coalition, hailing the start of what he called a 'real democratic era' in the country, but analysts said Mr Gilani's opening gambit spelt trouble for the president.
'This is the worst nightmare for the presidency. This is the worst dream they would have imagined coming true,' newspaper columnist and political analyst Ayaz Amir told reporters.
Brown's support 'I congratulate him and look forward to working closely with him on our shared agenda,' Mr Brown said in a statement released by his Downing Street office.
'The new government will face many challenges and the UK stands ready to assist Mr Gilani and his government in meeting them.'
'February's parliamentary elections were a crucial step towards a lasting democratic transition in Pakistan and I offer Mr Gilani and his government my full support.' -- AFP
British Prime Minister Gordon Brown offered Pakistan's new premier Yousuf Raza Gilani his 'full support' on Tuesday after he was sworn in by President Pervez Musharraf.
