Despite a lingering freeze in the Mideast peace process, Israeli and Palestinian businessmen hope to strengthen working ties via a new forum, Israeli business daily TheMarker reported on Sunday.

A draft underlining the terms of establishing a joint Israeli- Palestinian forum to arbitrate business disagreements was signed in Jerusalem last month under the auspices of the International Chamber of Commerce (ICC), the report said.

The ICC was established following World War I in order to promote peace via fair trade practices and is active in 140 nations worldwide. Since its founding in 1923, it has arbitrated in more than 17,000 cases.

The Jerusalem Arbitration Center (JAC) would have a wide- reaching financial significance," Oren Shahor, who chairs ICC Israel, was quoted by TheMarker as saying.

"The cooperation between us and ICC Palestine is apolitical and aims to bridge and solve potential business conflicts between Israeli and Palestinian businessmen. It will widen the scope of commerce between the sides," Shahor said.

The volume of business transactions between Israel and the Palestinian National Authority is estimated at 15 billion shekels (nearly 4.42 billion U.S. dollars) annually.

According to Shahor, most transactions are cash-based and JAC will enable to expand the activity to credit-based deals.

Hashem A-Shawa, the owner and chief executive officer of Bank of Palestine, and Samir Huleila, CEO of Fedico, the largest public company operating in the West Bank took part in recent administrative meetings in Tel Aviv. The JAC is slated to be inaugurated in the autumn.

A-Shawa and Huleila are both members of ICC Palestine's board of directors. Further meetings on the matter will be held at ICC's upcoming international convention in Mexico City, the report said.

According to the draft signed in May, the Israeli and Palestinian governments will finance 20 percent of JAC while private businessmen from both sides will contribute another 20 percent. The remainder will be financed by foreign organizations, which most likely view the new institution as an opportunity to deepen ties between Israelis and Palestinians.

Israel's Minister of Regional Development, Silvan Shalom, has pledged a 295,000 U.S. dollars investment in the initiative.

He said that a business arbitration institution will serve to provide Israeli businessmen legal protection and support in deals gone sour with West Bank merchants.

John Beechey, a British attorney and chairman of the International Court of Arbitration, the largest of its kind in the world, will oversee the new center's legal department.