(Reuters) -Palestinian President Mahmoud Abbas named Mohammad Mustafa, an ally and leading business figure as prime minister with a mandate to help reform the Palestinian Authority (PA), the state-run WAFA news agency said on Thursday.
Mustafa's appointment comes after mounting pressure to overhaul and revitalize the governing body of the occupied Palestinian territories and improve its governance in the occupied West Bank where it is based.
As president, Abbas remains by far the most powerful figure in the Palestinian Authority, but the appointment of a new government was a demonstration of his willingness to meet international demands for change in the administration.
Mustafa, who helped organize the reconstruction of Gaza following a previous conflict, was assigned to lead the relief and rebuilding of the area, which has been shattered by more than five months of war, and reform Palestinian Authority institutions, WAFA added.
Mustafa replaces former Prime Minister Mohammed Shtayyeh who, along with his government, resigned in February.
The Palestinian Authority, set up three decades ago under the interim peace agreement known as the Oslo Accords, exercises limited governance over parts of the occupied West Bank, which Palestinians want as the core of a future independent state.
But it may also play a key role in administering Gaza once fighting ends even though Israeli Prime Minister Benjamin Netanyahu has expressed strong opposition to its involvement in running the enclave.
The PA, controlled by Abbas' Fatah political faction, has long had a strained relationship with Hamas, the Islamist movement that runs Gaza, and the two factions fought a brief war before Fatah was expelled from the territory in 2007.
However it has repeatedly condemned the Israeli invasion of the Strip, following the Hamas-led assault on Israel on Oct. 7, and it has insisted it must play a role in running Gaza after the war.