Israel warm to draft Lebanese demarcation deal, sees gas profit-sharing By Reuters

By Dan Williams

JERUSALEM (Reuters) -Israel gave its preliminary nod on Sunday to a draft U.S.-brokered deal demarcating a maritime border with Lebanon that could lead to possible profit-sharing from future gas production by Beirut in a long-disputed Mediterranean prospect.

Hoping to defuse one source of conflict between the enemy countries and perhaps prod them toward accommodation, U.S. envoy Amos Hochstein last week submitted a new proposal that would pave the way for offshore energy exploration.

Beirut is studying the 10-page draft, details of which have not been made public. Iranian-backed Lebanese Hezbollah, which has clashed with Israel and previously voiced suspicions over any demarcation deal, called the draft “a very important step”.

Israeli approval of the draft awaited legal review, Prime Minister Yair Lapid told his cabinet at its weekly session.

“But,” he said in televised remarks, “just as we insisted from day one, the proposal fully preserves Israel’s national security interests, as well as our economic interests”.

Lapid appeared to float an arrangement whereby gas would be produced by a company under a Lebanese license in the disputed Qana prospect, with Israel receiving a share of revenues.

“We have no opposition to an additional Lebanese gas field being developed, from which we would of course receive royalties due us,” he said. “Such a field would weaken Lebanese dependency on Iran, restrain Hezbollah and bring regional stability.”

The centrist Lapid heads a caretaker government ahead of a Nov 1 election. His challenger, conservative ex-Prime Minister Benjamin Netanyahu, has argued the Lebanese deal could benefit Hezbollah, and accused Lapid of evading parliamentary scrutiny.

Gideon Saar, Lapid’s justice minister, acknowledged that such deals would generally be brought before the Knesset.

However, Saar told Kan radio, “there are exceptional cases where – and this requires the agreement of the justice minister – there is exemption from the mandatory submission. I do not want to be drawn on this until we understand matters fully.”