Ramallah: Hamas-nominated Prime Minister Ismail Haniyeh is to meet with Palestinian leader Mahmoud Abbas on Monday for consultations on forming a new government.

A senior Hamas member said on Sunday that Haniyeh would hold talks with various Palestinian factions.

Much of the discussion will be based in the Gaza Strip as a result of Israeli travel restrictions on the radical movement.

Haniya's nomination came as Israel branded the Palestinian government a "terrorist authority" and stopped the transfer of millions in aid to the Palestinian government.

Meanwhile, Haniya said he welcomed the nomination. "This is a decision of the movement across Gaza and the West Bank including those in the jails."

"We hope God will help us carry out this responsibility," he added.

Haniya is Hamas's top candidate in their January 25 landslide victory.

Hamas MP Aziz Duweik, speaker of the new parliament, said that Abbas had been informed of Hamas's choice for prime minister.

Abbas has already confirmed that he will ask Hamas to form the next government after the group beat his Fatah group in the elections.