Apart from the name, the mandate of the envoy was also debated in the Jerusalem meeting, various sources reported.

The EU's representative at the talks, Marc Otte, highlighted the task of institution building. "If there is going to be a Palestinian state it is very important to build the capacity of the institutions for this state to be a viable one," he said.

Mr Otte added that the mandate could be later expanded. The issue of the job description is crucial - the previous Quartet man in the Middle East, former World Bank president James Wolfensohn often expressed frustration over the limitations in his role.

He stepped down in April 2006 while criticizing the international community for its decision to cut humanitarian aid to the Palestinian Authority after Hamas - on the EU and US terrorist list - was voted into power in January.

Commenting on Mr Blair's potential appointment, Mr Wolfensohn said he is "an excellent choice and I hope his great experience will bring a new dynamic to the negotiations," adding that he should focus on promoting economic development in the Palestinian areas as "a foundation for lasting peace," Bloomberg reports.

In the region, Mr Blair has the "full" support of Israel, the country's prime minister Ehud Olmert informed him in a telephone conversation, his office stated.

Diplomats also suggested the Palestinian president Mahmoud Abbas would support the outgoing British leader as the Quartet envoy.

But Hamas group spokesman Fawzi Barhmoum commented that Mr Blair would not be welcome as he had supported "the Zionist occupation's terrorism and massacres against our people."

Asked by journalists about his nomination, Mr Blair said on Tuesday "I think anybody who cares about greater peace and stability in the world knows that a lasting and enduring resolution of the Israeli-Palestinian issue is essential and, as I have said on many occasions, I would do whatever I could to help such a resolution come about."