ISRAEL’S far-right Prime Minister Benjamin Netanyahu said on Wednesday that he has approved a $35 billion (£64bn) natural gas export deal to Egypt, the biggest gas deal in Israeli history.

The agreement could also help repair relations between the two countries strained during the two-year war in the Gaza Strip.

The gas will be delivered to Egypt over the next 15 years by US energy giant Chevron, a key owner of the gas field off Israel’s coast in the Mediterranean Sea.

Half of the proceeds are expected to go to Israel’s state coffers.

In a recorded video statement, Mr Netanyahu said the deal “greatly strengthens Israel’s position as a regional energy power, and it contributes to stability in our region.”

Egypt, which borders both Israel and Gaza, has served as a key mediator between Israel and Hamas leading up to the US-brokered ceasefire that was agreed on in October.

Cairo has claimed to be a critic of Israel’s attack on Gaza, which has killed tens of thousands of Palestinians and caused widespread destruction.

Egypt did not immediately confirm Mr Netanyahu’s announcement.

Israeli Energy Minister Eli Cohen, a close Netanyahu ally, previously held up the deal with Egypt, claiming the terms were not favourable to Israel.

But Mr Cohen stood alongside Mr Netanyahu during the Wednesday evening announcement and said he supported the final terms of the deal.

Israel discovered sizeable natural gas fields off its Mediterranean coast in the early 2000s and began exporting gas — first to Jordan and later to Egypt — nearly a decade ago.

In a separate development, German lawmakers approved an expansion of a defence agreement for Israel’s Arrow 3 missile defence system, Israel’s Defence Ministry said on Wednesday.

The expansion brings the value of the deal from $3.5 billion to $6.5bn, (£2.6bn to £4.9bn) making it the largest Israeli defence export deal ever, according to the ministry.