Israel, Jordan and the Palestinian Authority on Monday officially signed the "historic" water-sharing initiative at the World Bank in Washington, reports AFP.
The project envisions a new desalination plant at Aqaba as the lynchpin of a sharing deal linking the Red and Dead Seas and the Kinneret and end-users in all three parties to the deal.
"This is a historic agreement that realizes a dream of many years and the dream of Herzl,” said Shalom, according to a statement from his ministry. The agreement is of the highest diplomatic, economic, environmental and strategic importance."
He added, "I am pleased that an investment of years has reached its hoped-for conclusion and will benefit Israel and the residents of the region as a whole. The other goals of this project are the generation of electricity by utilizing the difference in elevation between the Red Sea and the Dead Sea and the development of tourism infrastructures."
"We showed that we can work together despite the political problems," said the PA’s water minister, Shaddad Attili, according to AFP.
Jordan’s Water and Irrigation Minister Hazem Al Nasser signed the agreement on behalf of his country.
The deal capped 11 years of negotiations and came as the United States pushes a new effort to forge a peace deal between Israel and the PA.
The pact, signed at the World Bank's headquarters in Washington, will see Jordan providing 50 million cubic liters of desalinated water to Israel's Red Sea resort of Eilat.
In exchange, the Jewish state will provide northern Jordan with the same amount of water from the Sea of Galilee.
It will also see Israel raising its annual sales of water to the Palestinian Authority by 20-30 million cubic meters a year, up from the current level of 52 million cubic meters.
On Monday morning, prior to the signing, Shalom told Army Radio that under the agreement, water will be drawn from the Gulf of Aqaba at the northern end of the Red Sea.
He also noted the economic aspects of supplying cheap desalinated water to neighboring states, the environmental angle of "saving the Dead Sea" and the "strategic-diplomatic" aspect of the deal, coming amid the struggling peace talks.
"This is a breakthrough after many years of efforts," said Shalom. "It is nothing less than a historic move."
He said that the next step would be an international tender for the entire project - building the desalination plant in Aqaba and laying the first of the four pipes for transporting the water.
In August, Jordan announced a $980 million project to transfer water from the Red Sea to the Dead Sea, which appears to have been a recent impetus to the deal.
As the PA and Israel sign an agreement for regional cooperation, the pressure on both sides continues to reach a peace deal, and the Jordan Valley region above the Dead Sea is becoming a topic of contention.
U.S. Secretary of State John Kerry made several offers to the PA regarding security in the Jordan Valley during his recent visit. PA officials say PA Chairman Mahmoud Abbas rejected the offers because they would not have prevented Israelis from living in the area.
In response to concerns that Israel will give up on the Jordan Valley, Major General Nitzan Alon, the Head of the IDF's Central Command on Sunday expressed firmness in arguing "that the Jordan Valley is a strategic buffer for Israel," and added that the US supports this position.
Research has illustration the serious dangers Israel would face without a security presence in the Jordan valley.
Kerry is planning to visit Israel and the PA once again this week. His spokeswoman said Monday that Kerry will arrive for a two-day visit on Thursday.