The Quartet of international mediators, the United States, United Nations, European Union and Russia, made the announcement shortly after Mr Blair handed power to party colleague Gordon Brown. Last-minute Russian hesitation was overcome.

Mr Blair, who led Britain for 10 years, welcomed the appointment as an opportunity to revive stalled peace efforts.

The Quartet expected Mr Blair to work with Palestinian President Mahmoud Abbas on building up institutions needed for a future state.

In another movement, Israeli forces killed at least 12 Palestinians, mostly gunmen but also a 12-year-old boy and other civilians, on Wednesday in the deadliest raid in the Gaza Strip since Hamas seized the territory, medical workers said.

Israel's operation in Gaza City and the southern town of Khan Younis appeared to signal it intended to keep strong military pressure on Hamas along with efforts to isolate the movement financially and politically.