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In this letter, we present an optimal joint relay selection (RS) and power allocation scheme for two-way relay networks which aim to establish a communication link between two transceivers with the help of one relay. Our approach is based on the maximization of the smaller of the received signal-to-noise-ratios (SNRs) of the two transceivers under a total transmit power budget. We show that this problem has a closed-form solution and requires only a single integer parameter (i.e, the index of the optimally selected relay) to be broadcasted to all relays. We also show that for large values of the total transmit power, the selection criterion can be approximated as the harmonic mean of the amplitudes of the relays' local channel coefficients. We evaluate the performance of our scheme numerically.