United States President Barack Obama called Iraq's Prime Minister Haider al-Abadi to congratulate him on the approval of a new government and discuss its efforts to fight Islamic State militants, the White House has said.

"Obama applauded the efforts of Prime Minister Abadi and other Iraqi leaders in forming a new, broad-based government, and underscored the need for the United States and Iraq to continue working closely with the international community to build on recent actions to counter the threat posed by the Islamic State of Iraq and the Levant," the White House said.

Obama, during the call, expressed his commitment to work with all communities in Iraq as well as regional and international partners to strengthen Iraq's capabilities to fight against the IS, earlier know as the ISIS. 

"Both the leaders agreed on the importance of having the new government quickly take concrete steps to address the aspirations and legitimate grievances of the Iraqi people," a White House statement said, adding that they expressed their support for a strong strategic partnership between the US and Iraq.

Meanwhile, US Secretary of State John Kerry hailed the formation of a new government in Baghdad as "a major milestone" for Iraq.