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Israel and the EU are in talks over a possible trade corridor that could see linking the eastern Mediterranean region with , Israel's finance ministry and central bank said on Monday.

The establishing of a regional railway system will boost the economies of Israel, , the Palestinian Authority, Saudi Arabia and other Gulf countries, the ministry claimed.

The new railway would be a "shorter, faster, cheaper and safer" way to connect the region than current trade routes, the Bank of Israel said.

It did not give any further details about the feasibility of the project, which would have to pass through Saudi Arabia - a country that Israel has no official ties with. 

The discussion came after Israel recently signed deals to normalise ties with Gulf states Bahrain and the UAE.

In 2018, Israel's then-Minister of Transport Yisrael Katz alluded to the revival of the historic Hejaz railway.

He said there were plans to extend the current Haifa-Beit Shein line in Israel into Jordan and joining with an extra line extending from the Palestinian city of Jenin.

"This is not a dream at all. This can be realised if there is a will," the minister said at the time in comments to .

"My vision to connect Saudi Arabia and the Gulf states and Jordan to the Haifa port and the Mediterranean Sea will transform Israel into a centre for naval transport and strengthen the Israeli economy," Katz  at the time.

The railway would also provide an alternative route to the Strait of Hormuz in the Persian Gulf, which is controlled by Iran.