NEW DELHI, Dec 8: India and Israel on Wednesday announced the setting up of a high-level think-tank to further improve relations and predicted trade would grow to an annual five billion dollars in the next three years.

Visiting Israeli Vice Prime Minister Ehud Olmert said he expected no difficulties in dealing with India's left-leaning Congress Party-led coalition government, which took office in May.

"It was the Congress government which established friendly relations with us 11 years ago and I find no difference in policy of the previous government and the present regime," Mr Olmert told Indian and Israeli businessmen in New Delhi.

Ties between India and Israel warmed dramatically after 1998 when then-prime minister Atal Behari Vajpayee took office. Congress has traditionally espoused the Palestinian cause. Mr Olmert urged Indian businesses to forge joint ventures with their Israeli counterparts to manufacture products for third countries.

"Israel is looking for a genuine, friendly and open-hearted partnership with India," he said, pointing to sectors such as infrastructure, information technology and telecom as "green pastures" for collaboration.

Mr Olmert also hailed the setting up of an India-Israel joint study group unveiled on Wednesday by Indian Commerce Minister Kamal Nath and said the think tank was a "definite breakthrough in bilateral relations".

The target for Indian-Israeli bilateral trade during the next three years would be five billion dollars. In the current fiscal year it is set to cross more than two billion dollars, Nath told business delegates.

Mr Olmert and a 60-member team are on a five-day visit to India. Last week the two countries ended four days of talks on strategies to combat terrorism and also held a maiden round of discussions on nuclear disarmament. -AFP