JERUSALEM (AFP) ― Israel’s government on Sunday gave the green light to building the first rail link between its Mediterranean and Red Sea coasts, offering a new Asia-Europe trade route to compete with the Suez Canal.

“This is a strategic decision,” Prime Minister Benjamin Netanyahu told ministers at the cabinet’s weekly meeting.

“In the coming decade, new (economic) powers will arise,” a statement from his office quoted him as saying. “It is within our power to create an alternative transport route, bypassing the Suez Canal.” It said that ministers voted unanimously to go ahead with the scheme.

At an initial cabinet meeting on the project last week, Netanyahu said the plan had “created very great interest among the emerging powers, China and India, and others.”

It also envisages a passenger line through the Negev desert which would for the first time would put Israel’s southern Red Sea resort of Eilat a two-hour train ride from Tel Aviv, 350 kilometers away.

Netanyahu’s office said the first stage would be to choose between three alternative financing schemes ― a bilateral agreement “between Israel and another government,” a partnership between the Israeli government and local investors, or full government funding.

The transport ministry says its preferred option is a joint project with China.

“The professional capability of the Chinese companies in the construction of railway systems and transport networks is among the best in the world,” Transport Minister Yisrael Katz said on the ministry’s website.

It says Katz met China’s transport minister in Beijing last September and the two agreed to prepare a joint proposal for the Eilat link.

Israeli officials say a so-called “Med-Red” railway could also be used for future exports of gas to India, and possibly China, from Mediterranean fields currently under development.

The two biggest Israeli finds, Tamar and Leviathan, lie respectively about 80 and 130 kilometers off the northern port city of Haifa.

Tamar is believed to hold at least 8.4 trillion cubic feet of gas, while Leviathan is believed to have reserves of 16 trillion cubic feet.

In June, an Israeli company announced the discovery of two new natural gas fields, Sarah and Mira, around 70 kilometers off the city of Hadera further south along the Mediterranean coast.