The document Mr. Abbas handed to Mr. Mustafa said the priorities of the government should include leading efforts to provide humanitarian aid to people in Gaza, reconstructing what has been destroyed during the war between Israel and Hamas, and putting forth plans and mechanisms to reunite Palestinian governing structures in the West Bank and the coastal enclave.

It also called for “continuing the reform process.”

Much of the Palestinian public sees the Palestinian Authority as tainted by corruption, mismanagement and cooperation with Israel.

As president, Mr. Abbas remains firmly in charge of the government. With no functional parliament, Mr. Abbas has long ruled by decree, and he exerts wide influence over the judiciary and prosecution system. There has been no presidential election in the Palestinian territories since 2005, and no legislative election since 2006.

In late February, Prime Minister Mohammed Shtayyeh tendered the resignation of his cabinet, citing the need for a new government that “takes into account the emerging reality in the Gaza Strip.” Mr. Shtayyeh’s government has continued in a caretaker capacity.

Hamas led a deadly assault from Gaza into Israel on Oct. 7, and Israel has answered with intense bombardment and an invasion, vowing to break the group’s grip on the enclave. But those events have raised difficult questions about how a postwar Gaza will be governed and rebuilt.

The Palestinian Authority has limited governing powers on the West Bank. It lost control of Gaza to Hamas in a 2007 power struggle.

The United States has been calling for overhauling the widely unpopular Palestinian Authority in recent months, hoping it could eventually assume the reins of governance in Gaza after the war. The Israeli prime minister, Benjamin Netanyahu, however, has rejected any such role for the authority.

While the Biden administration did not tell Mr. Abbas whom to appoint as prime minister, it conveyed that it hoped for an independent figure who was acceptable to ordinary Palestinians, the international community and Israel, according to Western diplomats, who spoke on the condition of anonymity because they weren’t authorized to speak with the media.

A spokeswoman for the National Security Council, Adrienne Watson, said in a statement that the Biden administration welcomed the appointment and urged “the formation of a reform cabinet as soon as possible.”

In the Palestinian Authority, the prime minister is supposed to oversee the work of ministries, but Mr. Abbas often intervenes in decision-making, according to analysts.

Nasser al-Qudwa, a former foreign minister whose name was floated as a possible prime minister, said before the announcement of Mr. Abbas’s choice that appointing Mr. Mustafa would represent “no real change.”

“It would be replacing one employee named Mohammed with another employee named Muhammad, while Abbas continues to hold all the cards. What’s the change?” said Mr. Qudwa, a fierce opponent of Mr. Abbas, who is also known as Abu Mazen. “Abu Mazen wants to keep the status quo. He wants to keep all of the power in his hands.”

In addition to serving as Mr. Abbas’s adviser, Mr. Mustafa, an economist educated at George Washington University in Washington, D.C., has been the chairman of the Palestine Investment Fund, whose board is appointed by the president of the authority. He has previously been the authority’s economy minister and deputy prime minister.

For weeks, Mr. Abbas has signaled his desire to appoint Mr. Mustafa. In January, he sent Mr. Mustafa to the World Economic Forum’s annual conference in Davos, where heads of state and foreign ministers gather to discuss global affairs.

At the conference, Mr. Mustafa said he thought the Palestinian Authority could improve its governance. “We don’t want to give any excuses for anyone,” he said in a wide-ranging discussion with Borge Brende, the forum’s president. “The Palestinian Authority can do better in terms of building better institutions.”

In his new position, Mr. Mustafa will likely face enormous challenges, which may include trying to reconstruct the devastated Gaza Strip and improving the credibility of the government.

Some analysts, however, said judgment on a new government should be reserved until the public learns the identities of its ministers, and how much authority and independence they can wield.

“We shouldn’t rush to say it will fail,” Ibrahim Dalalsha, the director of the Horizon Center for Political Studies and Media Outreach, a political analysis group based in Ramallah, West Bank. “We need to wait and see how it will perform.”