Talks between Israel and the Holy See have made "substantial progress" to resolve outstanding financial and legal issues, according to a joint statement by the parties.
The Middle East Times reports a permanent bilateral working committee met at the Vatican on Wednesday in "a climate of great cordiality," underscoring "significant, even substantial progress" achieved in the talks.
The two sides have been negotiating over the legal status of the Roman Catholic Church in Israel, notably the disposition of Church property and tax exemptions for revenue earned by Christian communities.
The issues remained unresolved following a basic accord signed by the two states in 1993. The Holy See wants exemption from all taxes for the Church and its institutions.
Talks resumed in 2004 after a 10 year hiatus and have since proceeded intermittently.
"We hope that we will reach a solution in the next 13 years," joked Archbishop Antonio Maria Veglio, secretary of the Vatican Congregation for the Eastern Churches, after the committee's last meeting in December 2007 in Jerusalem.
Veglio recalled that a visit by Pope Benedict XVI to Israel at the invitation of the Hebrew state was contingent on the finalisation of the accord.
A previous meeting of the joint committee in May 2007, also concluded with "important progress, the paper noted.
The latest meeting also "accomplished significant progress toward the shared goal, both substantively and in terms of putting in place procedures to improve (the) desired effectiveness of the ongoing negotiations," according to the statement quoted by Catholic News Service.
It said the next plenary meeting would take place in Israel in December.
Vatican, Israel report 'substantial' progress in talks (Middle East Times, 29/5/08)
Vatican-Israeli commission reports 'significant progress' (Catholic News Service, 29/5/08)