September 21, 2005

Israel's finance minister, Benjamin Netanyahu, predicted yesterday that the British-era oil pipeline from Iraq's northern oilfields through Jordan to the Israeli port city of Haifa would be reopened.

"It won't be long when you will see Iraqi oil flowing to Haifa," Mr Netanyahu told a group of British investors in London. "It is just a matter of time until the pipeline is reconstituted and Iraqi oil will flow to the Mediterranean."

The pipeline was closed during the first Arab-Israeli war in 1948 and has never been used since. Its rehabilitation would dramatically enhance regional economic co-operation after decades of war and mutual suspicion.

But the project is unlikely to become reality before a permanent settlement between Israel and the Palestinians.