The Israeli government on Thursday approved a maritime demarcation deal with Lebanon, setting for the first time a border between the two countries, which have been in an official state of war since 1948.

The "historic" agreement would strengthen Israel's security and economy, Prime Minister Yair Lapid told a government meeting, adding that 17 per cent of the profits from Lebanon's Qana natural gas field in the disputed area would be shared with the Jewish state, reports Xinhua news agency.

Earlier in the day, Lebanese President Michel Aoun signed a letter approving the deal.

The deal, first announced on October 11, lays out a demarcation line between the two countries in the disputed zone in the eastern Mediterranean, where several natural gas fields are located. (SJ/IANS)