The announcement was made by Israeli Prime Minister Ariel Sharon and his Turkish counterpart, Recep Tayyip Erdogan, at a joint news conference in Jerusalem on Sunday.

Sharon also said Israel and Turkey are to set up a hotline connection similar to other links that are used to share security information, adding that Israel already had such links with the United States, Britain, the EU and Russia

Erdogan arrived in Israel on Sunday for a visit aimed at promoting Turkey as a Middle East peacemaker.

The Israel visit is a first for Erdogan, whose ruling party has roots in political Islam and who last year described Israeli Prime Minister Ariel Sharon's crackdowns in the West Bank and Gaza Strip as "state terrorism".

"Our good relations with Israel do not preclude us from making frank criticism," Erdogan told the Turkish Daily News in an interview before his departure.

"My visit will hopefully provide a new impetus to our relationship."

Israel counts Turkey as its most important regional ally, with $2 billion in annual trade.

The Israeli newspaper Haaretz said Erdogan's visit would include the signing of major arms deals, among them a $400-500 million upgrade of Turkish warplanes.
  
"There are different projects in the works. We have a good security relationship and a good economic relationship with Turkey," Israeli Foreign Ministry spokesman Mark Regev said.

Erdogan heads to the West Bank on Monday to meet Palestinian President Mahmud Abbas.