UN Secretary-General Antonio Guterres had informed the Security Council this week of his intention to name Fayyad to lead the UN support mission in Libya and help broker talks on a faltering political deal.
The UN chief gave the council until yesterday to consider the choice and the United States came forward to raise objections.
The US mission did not immediately respond to a request for comment.
Fayyad, 65, was prime minister of the Palestinian Authority from 2007 to 2013 and also served as finance minister twice.
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