Nicosia–Cyprus and Israel signed an agreement Friday that defines their sea border and allows the neighbours to forge ahead in the search for energy sources in the eastern Mediterranean.
The agreement, which delineates an exclusive economic zone between the two countries, was signed in Nicosia by Cypriot Foreign Minister Marcos Kyprianou and Israeli Minister of National Infrastructure Uzi Landau.
This is seen as another step in Cyprus' search for undersea oil and gas deposits. The island has already signed similar agreements with Egypt and Lebanon.
The Israeli embassy in Nicosia said the signing reflected the close relationship between the two countries.
"In light of the recent discovery of a wealth of natural resources in the Mediterranean Sea, the delimitation of Israel's borders will play an important role in securing Israel's vital economic interests," said an embassy statement.
It said such an agreement would offer "clarity to Israel's neighbours as to the precise location of Israel's maritime borders and its right to natural resources at sea."
Cyprus has signed delineation agreements with Egypt and Lebanon, which have agreed to mutually exploit hydrocarbon deposits that criss-cross their boundaries.
But the deal with Beirut has yet to be ratified by the Lebanese parliament.
Despite delays, Cyprus says it will soon launch a second licensing round after the exploration procedure was launched three years ago.
The Nicosia government says it is committed to continuing consultations with its neighbours in the search for hydrocarbon reserves within Cyprus's exclusive economic zone.
Turkey has voiced its disapproval of Cyprus's oil and gas search.
In 2008, Nicosia protested to the United Nations and European Union over what it called Turkish harassment of ships conducting exploration surveys in Cyprus's EEZ.
Cyprus, an EU member state, has been divided since 1974 when Turkey seized and occupied its northern third in response to an Athens-engineered coup in Nicosia seeking to unite the island with Greece.
Texas-based US firm Noble Energy has been granted a licence to search for oil in one of 11 designated blocks inside Cyprus's exclusive economic zone off the south coast.
In 2007, Cyprus launched an initial licensing round for designated blocks covering 51,000 square kilometres (20,400 square miles) below the Mediterranean.