Israel Okays Development of Gaza Offshore Gas Field

Israel has held new talks with the Palestinians over the development of a gas field off the coast of the Gaza Strip, the Israeli foreign ministry said in a new report released on Sunday.

The report, prepared for submission to a New York gathering of donors to the Palestinian Authority, describes meetings and initial negotiations between the two sides on the thorny subject of the development of the Gaza Marine gas field.

"Development of the Gaza Marine gas field will generate revenues that could contribute dramatically to Palestinian fiscal sustainability," the report says.

"Following an approach by the Palestinian Authority, Israel confirmed its intention to engage in a meaningful discussion with the aim of developing the Gaza Marine gas field.

"In this context, official letters were submitted and meetings took place between Israeli representatives and the Palestinian leadership. These were followed by initial negotiations between the relevant parties regarding the development of the Gaza Marine gas field."

An Israeli official, who spoke to Agence France Presse on condition of anonymity, declined to specify when the meetings began or how advanced negotiations were, but he said Israel was eager to see work begin on the gas field.

"We're ready to move ahead on this. From our point of view this could be a big gain for the Palestinian Authority, and Israel's willing to move ahead on this quickly," he said.

"We have agreed on the principles, and now we can, from Israel's point of view, we are ready to move ahead very expeditiously with the process."

The report also gives no details when the meetings took place, or whether the discussions are ongoing.

It says that the gas project is one of several measures "to support PA economic stability."

Government officials told AFP that a proposal to issue a further 5,000 permits for Palestinian building and farm labourers to work in Israel was expected to be approved by a ministerial committee late Sunday or on Monday morning.

The increase would bring the total number of Palestinians currently allowed employment in the Jewish state to 46,450.

The development of the Gaza Marine field has been on hold for years, with Israel and the Palestinians at odds over the project, despite international interest in exploiting the field.

The situation is additionally complicated by Palestinian internal divisions.

The Palestinian Authority government headed by president Mahmud Abbas controls only the West Bank, with Israel and much of the international community declining to engage with the Islamist Hamas rulers of the Gaza Strip.

Israel, which relies on Egypt for most of its natural gas, has at times publicly suggested it could purchase gas from the field. But on other occasions it has disputed Palestinian sovereignty over the area.

The Palestinian Authority granted British Gas and the Consolidated Contractors Company group exploration rights in 1999, but Israeli objections and various disputes have held up development.

In 2007, British Gas ended negotiations with Israel on the sale of Gaza Marine gas to the Jewish state, and subsequently closed its office in Israel.

British Gas drilled two wells in the area in 2000, estimating resources at 1 trillion cubic feet.