US Middle East envoy Jason Greenblatt at a press conference on Thursday morning alongside Israeli Minister of Regional Cooperation Tzahi Hanegbi, and head of the Palestinian Water Authority Mazen Ghuneim.
"The United States welcomes the agreement reached by the Palestinian Authority and the government of Israel which will allow for the sale of up to 33 million cubic metres of water from Israel to the PA", Greenblatt said at a signing ceremony in Jerusalem.
President Donald Trump has tasked Greenblatt with kick-starting long-moribund peace negotiations between Israel and the Palestinians.
President Donald Trump's global negotiations representative, Jason Greenblatt, Thursday announced an agreement between Israel and the Palestinian Authority (PA) on a historic Red Sea-Dead Sea canal.
"President Trump has made it clear that working towards achieving a lasting peace agreement between the Israelis and Palestinians is a top priority for him, and he strongly believes that peace is possible", the White House said in a statement.
Jason Greenblatt hailed an "important step forward" in a wider regional water deal, as Israel announced it would provide more than 32 million cubic metres of water to the Palestinians annually. The undrinkable brine will be used to help replenish and restore the Dead Sea, which is slowly disappearing. The pipeline also will power a water desalinization plant that will provide the additional fresh water.
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Palestinian officials say the Israeli military has shot and killed two people who hurled stones at troops on an arrest raid in the northern West Bank.
During the announcement of the water deal in Jerusalem, Greenblatt declined to discuss whether he was making progress in bringing the Israelis and Palestinians to the peace table. "In addition, we hope that the deal will contribute to the healing of the Dead Sea and that will help not only Palestinians and Israelis but Jordanians as well".
A spokesman from Prime Minister Benjamin Netanyahu's office said Wednesday that the government will deliberate the issue of Palestinian development in Israeli military controlled areas of the West Bank later this month. Now 97 percent of Gaza's water is not potable.
The plan calls for the construction of a 180-kilometer (111-mile) channel, along with hydroelectric and desalination plants in Jordan, with joint Israeli-Jordanian administration and financing.
The pipeline project is expected to be completed in four or five years.