Palestinian leader appoints longtime adviser as prime minister in the face of calls for reform

RAMALLAH, West Bank -- Palestinian President Mahmoud Abbas has appointed his longtime economic adviser to be the next prime minister in the face of U.S. pressure to reform the Palestinian Authority as part of Washington's postwar vision for Gaza.

Mohammad Mustafa, a U.S.-educated economist and political independent, will head a technocratic government in the Israeli-occupied West Bank that could potentially administer Gaza ahead of eventual statehood. But those plans face major obstacles, including strong opposition from Israeli Prime Minister Benjamin Netanyahu, and the Israel-Hamas war that is still grinding on with no end in sight.

It's unclear whether the appointment of a new Cabinet led by a close Abbas ally would be sufficient to meet U.S. demands for reform, as the 88-year-old president would remain in overall control.

"The change that the United States of America and the countries of the region want is not necessarily the change that the Palestinian citizen wants," said Hani al-Masri, a Palestinian political analyst. "People want a real change in politics, not a change in names ... They want elections."

He said Mustafa is "a respected and educated man" but will struggle to meet public demands to improve conditions in the occupied West Bank, where Israeli restrictions imposed since the start of the war have caused an economic crisis.

In a statement announcing the appointment, Abbas asked Mustafa to put together plans to re-unify adminstration in the West Bank and Gaza, lead reforms in the government, security services and economy and fight corruption.

Washington welcomed his appointment but urged that Mostafa quickly form a Cabinet to implement changes.

"The United States will be looking for this new government to deliver on policies and implementation of credible and far-reaching reforms. A reformed Palestinian Authority is essential to delivering results for the Palestinian people and establishing the conditions for stability in both the West Bank and Gaza," National Security Council spokesperson Adrienne Watson said.

Mustafa was born in the West Bank town of Tulkarem in 1954 and earned a doctorate in business administration and economics from George Washington University. He has held senior positions at the World Bank and previously served as deputy prime minister and economy minister. He is currently the chairman of the Palestine Investment Fund.

The previous prime minister, Mohammad Shtayyeh, resigned along with his government last month, saying different arrangements were needed because of the "new reality in the Gaza Strip."

The Palestinian Authority was established in the 1990s through interim peace agreements and was envisioned as a stepping-stone to eventual statehood.

But the peace talks repeatedly collapsed, most recently with Netanayahu's return to power in 2009. Hamas seized power in Gaza from forces loyal to Abbas in 2007, confining his limited authority to major population centers that account for around 40% of the Israeli-occupied West Bank.

Abbas is deeply unpopular among Palestinians, many of whom view the PA as little more than a subcontractor of the occupation because it cooperates with Israel on security matters. His mandate ended in 2009 but he has refused to hold elections, blaming Israeli restrictions. Hamas won a landslide victory in the last parliamentary elections, in 2006. Although it is considered a terrorist group by Israel and Western countries, Hamas would likely perform well in any free and fair vote.

Abbas, unlike his Hamas rivals, recognizes Israel, has renounced armed struggle and is committed to a negotiated solution that would create an independent Palestinian state alongside Israel. That goal is shared by the international community.

Israel has long criticized the PA over payments it makes to the families of Palestinians who have been killed or imprisoned by Israel, including top militants who killed Israelis. The PA defends such payments as a form of social welfare for families harmed by the decades-old conflict.

The dispute has led Israel to suspend some of the taxes and customs duties it collects on behalf of the PA, contributing to years of budget shortfalls. The PA pays the salaries of tens of thousands of teachers, health workers and other civil servants.

The United States has called for a reformed PA to expand its writ to postwar Gaza ahead of the eventual creation of a Palestinian state in both territories. Netanyahu has ruled out any role for the PA in Gaza, and his government is opposed to Palestinian statehood.

Israel captured the West Bank, Gaza and east Jerusalem in the 1967 Mideast war. The Palestinians want all three territories to form their future state.

Israel annexed east Jerusalem in a move not recognized internationally and considers the entire city -- including major holy sites sacred to Jews, Christians and Muslims -- to be its undivided capital. Israel has built scores of settlements across the West Bank, where over 500,000 Jewish settlers live in close proximity to some 3 million Palestinians.

Israel withdrew soldiers and settlers from Gaza in 2005, but along with Egypt imposed a blockade on the territory when Hamas seized power two years later.

Netanyahu has vowed to dismantle Hamas and maintain open-ended security control over Gaza in the wake of Hamas' Oct. 7 attack, in which militants stormed into southern Israel, killing some 1,200 people and taking another 250 hostage. Israel's subsequent invasion of Gaza has killed more than 31,000 Palestinians, according to Gaza health officials.

The Palestinian Authority has said it will not return to Gaza on the back of an Israeli tank, and that it would only assume control of the territory as part of a comprehensive solution to the conflict that includes statehood.