Egyptian General Petroleum Corporation (EGPC) is ready to supply Israel Electric Company (IEC) through its intermediary, East Mediterranean Gas, according to the Middle East Economic Survey (MEES) in its Monday weekly report.
The Egyptians are offering seven billion cubic metres of natural gas a year for 20 years via the underwater pipeline from al-Arish, says MEES, citing a letter from EGPC's chairman Ibrahim Salih to IEC.
MEES says Israeli authorities have set a November deadline for reaching a deal with the Egyptians.
The proposed deal is likely to cause an outcry among Egypt's many native pro-Palestinian supporters, coming as it does amid continuing clashes between Israeli occupation forces and Palestinians in the West Bank and Gaza.
Israeli media have interpreted the resumption of talks with Egypt as aimed at sidelining potential supplies from a British Gas-operated project off the Gaza shore.
Although Israel currently supplies its power plants with gas from its offshore Mediterranean reserves, it is eager to diversify its sources.
Talks between Egypt and Israel on gas supplies started in April 2000, but were interrupted by the start of the Palestinian Intifada in September 2000.