°®Âþµº

Israel's foreign minister has extended Eid greetings to his Bahraini counterpart amid signs the Jewish state and the Gulf island kingdom could begin formal diplomatic relations.

Israel Katz sent the message to his "friend" Khalid bin Ahmed Al Khalifa in on Tuesday, weeks after their first public meeting in the US.

"I want to wish my friend the Foreign Minister of Bahrain and the people of Bahrain a happy Eid Al-Adha," Katz said.

"May our common heritage as the sons of Abraham lead to peace and brotherhood between our nations and cooperation between our countries. I look forward to seeing you again soon," he added.

Israel has diplomatic relations with only two Arab countries - Egypt and Jordan - but common concerns over Iran have brought it closer to Gulf nations in recent years.

Katz met with Al Khalifa in July in Washington despite the lack of relations between the two countries.

Al Khalifa gave an unprecedented interview in June to an Israeli television channel calling for "peace" with Israel and urging "better relations" with the country.

"Israel is part of this heritage of this whole region, historically. So, the Jewish people have a place amongst us," he said.

Bahrain hosted a conference to discuss what the US has described as the economic part of President Donald Trump's "deal of the century", his proposal for solving the Israeli-Palestinian conflict.

The Palestinian Authority boycotted the conference, accusing the unabashedly pro-Israel Trump of dangling the prospect of cash to try to impose political solutions, and of ignoring the fundamental issue of Israeli occupation.