Israel has held discussions with the Palestinian Authority (PA) over plans to develop a gas field off the coast of the blockaded Gaza Strip, Israel’s foreign ministry said in a report.
Prepared for a gathering of donors to the PA in New York, the report released on Sunday said initial negotiations have begun on the controversial issue.
"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," the report said, according to the AFP news agency.
"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."
The report did not say when or where discussions between the PA and Israel took place, nor does it mention if negotiations are ongoing.
"We're ready to move ahead on this," an Israeli official told AFP on the condition of anonymity.
"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.
As envisaged in the exploratory gas talks initiated by peace envoy Tony Blair, the PA would alone levy tariffs on any eventual revenues from private pumping in Gazan waters, though breakaway Hamas Islamists govern the coastal enclave.
Internal divisions among Palestinians have made the long sought after gas deal difficult.
Israel refuses to negotiate with Hamas, the movement which controls the Gaza Strip.
The PA, which is in charge of the West Bank, 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 Israel, and subsequently closed its office in the country.
British Gas drilled two wells in the area in 2000, estimating resources at 1 trillion cubic feet.
It is unclear how sovereignty and financial disputes will be negotiated over waters off the Gaza Strip and a timetable for new drilling has not been announced.
Israel has been vigorously developing its own Mediterranean gas fields in a hope for energy independence partly spurred by political instability and pipeline sabotage in neighbouring Egypt, which once supplied 40 per cent of its gas.