The US-led defence alliance was meeting seven Mediterranean partners for talks in Rabat, Morocco, on Friday, following regular political consultations that began in 1995 and were re-launched in 2004. Previous sessions have been held in Nato countries.
Nato has been running patrols in the Mediterranean under the codename Operation Active Endeavour since shortly after the September 11 attacks on the United States.
Alessandro Minuto Rizzo, Nato's deputy secretary-general, said: "Algeria, Israel and Morocco have decided to participate in the Operation Active Endeavour.
"Naturally, the decision needs practical steps to be materialised."
Ambassadors of the 26-nation alliance ended the meeting with representatives of Algeria, Egypt, Israel, Jordan, Morocco, Mauritania and Tunisia with pledges to expand cooperation in fighting terrorism, illegal migration and the proliferation of prohibited weapons.
Israel has no diplomatic relations with Algeria, and Morocco suspended low-level ties with Israel in 2000.
Oded Eran, the Israeli ambassador, said: "Such a meeting helps in deepening understanding and trust between the partners. We have the same borders and we face the same security challenges.
"Several ideas have been discussed, among them setting up a training centre in Jordan and creating a trust fund to finance cooperation activities."