St Peter's Square, Vatican City. Photo: wiki commons.

Israel and the Vatican are on the verge of signing a historic agreement that will formalize diplomatic relations as well as potentially improve Israel’s ties with the global Catholic community.

While Israel and the Vatican established formal diplomatic relations in 1993, they have differed on a number of key areas, the status of the Catholic Church in Israel, sovereignty over Catholic sites, taxation and expropriation.

One of the most contentious areas was a dispute over the Cenacle—the traditional site of the Jesus’s Last Supper on Mount Zion in Jerusalem. According to the agreement, Israel did not give up sovereignty over it, but will allow the Vatican control over the site, Israel Hayom reported.

In comments to the Jerusalem Post, Deputy Foreign Minister Danny Ayalon said that the two sides were “on the verge of signing, subject to final approval by the government of Israel and the Holy See.”

This agreement is “real upgrade in relations between Israel and the Holy See, and between the Jewish people and one billion Catholics around the world, to the benefit of both sides,” Ayalon added.