Lebanon and Israel have reached a historic agreement demarcating a disputed maritime border between them, Israeli Prime Minister Yair Lapid said on Tuesday.

While limited in scope, a deal would mark a significant compromise between states with a history of war, opening the way for offshore energy exploration and easing a source of recent tensions between states.

"This is a historic achievement that will strengthen Israel's security, inject billions into Israel's economy, and ensure the stability of our northern border," Lapid said in a statement.

Lebanese President Michel said earlier that the terms of the final draft received from U.S. envoy Amos Hochstein satisfied Lebanon and he hoped the deal would be announced as soon as possible, the presidency said in a statement seen by Reuters.

Israeli National Security Advisor Eyal Hulata earlier also gave a positive assessment:

"All our demands were met, the changes that we asked for were corrected. We protected Israel's security interests and are on our way to a historic agreement," he said in a statement.

Hochstein has been shuttling between the sides which have no diplomatic relations.

The heavily armed, Iran-backed Lebanese group Hezbollah has not commented on details of proposals throughout the indirect negotiations, but has said it would agree to the Lebanese government's position.

Hezbollah leader Sayyed Hassan Nasrallah, whose group has fought numerous wars with Israel, has also repeatedly warned of an escalation if the deal does not secure Lebanon’s maritime rights. Nasrallah is due to make an address later on Tuesday.

Earlier, Lebanese negotiator Elias Bou Saab told Reuters that if everything went well, Hochstein's "efforts could imminently lead to a historic deal."

Lebanon felt the latest draft "takes into consideration all of Lebanon's requirements and we believe that the other side should feel the same," he said.

While Israel has moved ahead with production and export, Lebanon's efforts have been hamstrung by political dysfunction.

A gas find would be a major boon for Lebanon, which has been mired in a financial crisis since 2019. Eventually, such a discovery could fix Lebanon's long-standing failure to produce adequate electricity for its population.

Kickstarting gas search

Following the striking of the deal, Lebanon on Tuesday asked French energy giant TotalEnergies to kickstart gas exploration off its shores.

Following Israel's announcement on Tuesday, Lebanon's caretaker prime minister, Najib Mikati, met a visiting delegation from TotalEnergies – which was awarded an exploration license in 2018.

"During the meeting, Mikati called on representatives of TotalEnergies to immediately begin taking operational steps to drill in Lebanese waters," his office said in a statement.

Lebanon has yet to officially agree to the deal, but Mikati said he hoped a "conclusion would be reached soon" that could pave the way for "gas exploration in Lebanese waters."

Lebanon's energy minister, Walid Fayad, who also attended the meeting, said that "logistical matters take time, but work will start immediately."

TotalEnergies is part of a consortium of energy giants awarded a license to explore for gas in two of Lebanon's 10 blocks, numbers 4 and 9.

In one well drilled in Block 4 in 2020 by TotalEnergies, Eni and Novatek showed only traces but no commercially viable gas deposits.

Block 9, near the border with Israel, contains the so-called Qana field or Sidon reservoir and will be a major zone for offshore exploration after a deal is finalized, according to Lebanese officials.

Lebanon will "get its full rights from the Qana fieldb" and Israel could receive compensation through Total, said Elias Bou Saab, Lebanon's lead negotiator in the maritime border talks.