Washington lauded the choice of a new Palestinian prime minister Sunday, saying that Rami Hamdallah‘s appointment came at a challenging time but that it created an opportunity.

US Secretary of State John Kerry congratulated Hamdallah in a statement Sunday night, hours after Palestinian Authority President Mahmoud Abbas announced he had asked the university chief and English professor to form a new government.

“Together, we can choose the path of a negotiated two-state settlement that will allow Palestinians to fulfill their legitimate aspirations, and continue building the institutions of a sovereign and independent Palestinian state that will live in peace, security, and economic strength alongside Israel,” the statement by Kerry said.

Kerry is hoping to win Israeli approval for Palestinian economic projects in the West Bank. Salam Fayyad, a respected economist who was forced out of the prime minister’s office earlier this year, was considered key to overseeing the projects.

Kerry also thanked Fayyad for his years of working “tirelessly to build effective Palestinian institutions.”

Rami Hamdallah (photo credit: An-Najah University)

Rami Hamdallah (photo credit: An-Najah University)

While Fayyad came from the small reformist Third Way party and often found himself on the wrong side of Abbas, Hamdallah, 55, is a member of Abbas’s Fatah party and is expected to be more pliant toward the Muqata.

Though he has no prior political or government experience, Hamdallah‘s loyalty to Abbas may make it easier for Ramallah to push through the types of projects Kerry envisions as jump-starting the Palestinian economy.

Speaking at the World Economic Forum in Jordan last week, Kerry announced a financial initiative aimed at pumping $4 billion into the flailing Palestinian economy as a means toward pushing the Palestinians into peace negotiations with Israel.

Palestinian Prime Minister Salam Fayyad speaks underneath a poster of a young Yasser Arafat (photo credit: Issam Rimawi/Flash90)

Former Palestinian prime minister Salam Fayyad (photo credit: Issam Rimawi/Flash90)

Ramallah, which insists on a settlement freeze before talks, has officially been cold toward the idea of making political concessions in exchange for financial incentives, however.

The appointment means that Palestinians are unlikely to head to elections any time soon, keeping Abbas in power as head of the PA. His term was supposed to end in 2009.

Palestinians have faced political stagnation since the Islamic militant Hamas seized power in the Gaza Strip five years ago. Efforts to heal the rift and hold elections in both territories have repeatedly failed.