A new Italian-Israeli-Palestinian joint venture is being set up to export fresh produce to the EU. The enterprise aims to supply core salad and vegetable lines such as cucumbers, tomatoes, aubergines, carrots and capsicum to the wholesale sector. The plan also accommodates some fruit exports, most notably grapes.

According to reports published in the Israeli press, the new export venture will refrain from targeting markets where Israeli farmers export their produce, "but will focus on penetrating popular, open markets in Western Europe."

Under the terms of the deal, the first of its kind involving a Palestinian farming association with a European partner, the latter will act as broker and together with the Israeli partner, will assume the responsibility of policy and planning.

Meanwhile, in another development, the Israeli government has authorised its infrastrudture ministry to sign a deal with Turkey to supply Israel with 1 billion m3 of fresh water over a 20-year period. The initial agreement was signed in October 2002 between the Israeli prime minister and the Turkish energy minister. Trade sources estimate that the price of the water at the Israeli port will amount to $1.05 per cubic metre, twice the price set by desalination consortia that won recent bids to desalinate sea-water.

Prime minister Ariel Sharon explained that there is "far reaching importance and significance, beyond the sheer economic aspect, for signing the water pact with Turkey," which pertains to the continuation of "a proper and stable strategic relationship between the two countries." One Israseli source reported that during the government's meeting, it was disclosed that Turkey considered preventing Israeli companies from participating in agricultural tenders, "should the water pact not be approved."