Lieutenant-General William Ward, Rice's surprise choice, is currently serving as deputy commanding general of the US Army Europe, and chief of staff of the US Seventh Army.
He will be helping to monitor compliance with security commitments made by Palestinians and Israelis.
"General Ward will travel to the region to make an initial assessment in the next few weeks," Rice said at a press conference at Tel Aviv airport on Monday.
"We are very clear that the parties need to live up to their obligations. There are going to be specific things that the parties need to do and we will not hesitate to say to the parties when those obligations are not being met," she said.
Ward, who is not known to speak a foreign language, served as head of the Office of Military Cooperation in Egypt from February 1998 to July 1999.
Condoleezza Rice has extracted
tough security commitments
An infantry commander, he served as a brigade commander in the 10th Mountain Division in the ill-fated peacekeeping mission in Somalia from June 1992 to June 1994.
He commanded the 25th Infantry Division based in Hawaii from July 1999 to November 2000, was vice director of opertions on the Joint Staff from November 2000 to October 2002, and as commander of the Nato-led Stabilisation Force in Bosnia from October 2002 to October 2003.
A graduate of Morgan State University, he entered the army in June 1971. He has a master's degree in political science from Pennsylvania State University, taught at West Point, and attended the US Army Command and General Staff College and the US Army War College.