A smooth cut-off formulation of the Hierarchical Reference Theory (HRT) is developed and applied to a Yukawa fluid. The HRT equations are derived and numerically solved leading to: the expected renormalization group structure in the critical region, non classical critical exponents and scaling laws, a convex free energy in the whole phase diagram (including the two-phase region), finite compressibility at coexistence, together with a fully satisfactory comparison with available numerical simulations. This theory, which also guarantees the correct short range behavior of two body correlations, represents a major improvement over the existing liquid state theories.
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