Zurfi, a 54-year-old lawmaker, has 30 days to form his cabinet which he must then put to a vote of confidence in Iraq's notoriously divided parliament.

He would replace outgoing premier Adel Abdel Mahdi, who resigned in December following popular mass rallies against a government that protesters see as corrupt, inept and beholden to powerful neighbour Iran.

An earlier nominee failed to form a cabinet by March 2, triggering a new 15-day deadline for Saleh.

Zurfi is a current member of the Nasr coalition led by ex-PM Haider al-Abadi and a former member of the Dawa party, a longtime opposition party to ex-dictator Saddam Hussein.

Since the 2003 US-led invasion that toppled Saddam, cabinets have been formed through a sectarian power-sharing system, leading to widespread horsetrading among various sects and parties.

A senior government source told AFP that political factions had intensely debated names for days, seeking a "non-confrontational" figure to preserve the status quo.

The announcement came just hours after Iraq faced a new rocket attack targeting foreign troops stationed at military bases across the country.

Two rockets hit the Besmaya base about 60 kilometres (40 miles) south of Baghdad before dawn on Tuesday, according to the Iraqi military, the US-led coalition and NATO, which all have forces stationed there.

The Iraqi military made no mention of casualties and a NATO press officer told AFP that none of its forces were hurt in the attack.