Israel hopes to sign Egypt gas deal in May

CAIRO, April 12 (AFP) -

Egypt and Israel are on the verge of signing a deal for Egyptian gas supplies to the Jewish state, Israeli Foreign Minister Silvan Shalom said Tuesday.

"We are very close to signing the gas agreement," said Shalom at a joint news conference in Cairo with his Egyptian counterpart Ahmed Abul Gheit.

"I would like to believe that we're in the final stages and that we will do it in the beginning of May," he said, adding that the energy ministers of the two countries were in charge of the negotiations.

It was the first time an Israeli official raised the issue of the gas deal in public during a visit to Egypt.

Talks to export Egyptian gas to Israel were launched in April 2000, but faltered a few months later after the outbreak of the Palestinian intifada which strained ties between Cairo and Tel Aviv.

Ties have improved since Egypt hosted a Middle East peace summit in February.

According to Israeli press reports, an informal agreement has already been reached with an Egyptian-Israeli firm, EMG.

Under the deal, approved in February by Israeli Infrastructure Minister Benjamin Ben Eliezer, Egypt would export between 1.7 and three billion cubic metres (60 and 106 billion cubic feet) of natural gas a year over 15 years.

The first concrete sign of a thaw in ties between Cairo and Tel Aviv came in December when they signed a free trade zones accord.

It allowed goods from the zones to enter the United States without customs tariffs, provided at least 35 percent of the product results from cooperation between Israeli and Egyptian companies.

The accord will boost the volume of Israeli-Egyptian trade to 70 million dollars a year from the current annual level of 44 million dollars, Oded Tirah, president of the Israeli Manufacturers' Association, said at the time.

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