US$30 million is set aside to buy American auto transportation from Israel to the West Bank, which will help ease Israeli-Palestinian tensions, a US-Israeli transport consortium announced.
The Israeli transport ministry said that the project will reduce the number of Israeli trucks in the West to just 25,000 annually, and will be financed by a US$29.5 million loan.
The deal was approved by the Israeli parliament on Thursday and is scheduled to be signed on June 1, a day before the Palestinian Authority holds its elections.
The Israeli transportation ministry declined to say when the loan would be paid off.
Palestinian President Mahmoud Abbas, who has been pressing for a two-state solution to the Israeli-occupied West Bank and Gaza Strip, is expected to attend the signing ceremony.
Israel, which has been seeking the sale of about 70 percent of its land and 80 percent of the natural gas reserves in the occupied West Bank for decades, has been negotiating a similar deal with the Palestinian authority since 2012.
Palestinian Authority President Mahmoud Ahmadinejad was not among the foreign dignitaries attending the ceremony.
A recent poll by the Palestinian Center for Policy and Survey Research showed that 81 percent of Palestinians believe the deal with Israel is beneficial to the Palestinians.
Palestinian officials have said they would like to see the loan extended to cover the cost of a new road linking the northern West Bank town of Nablus to the city of Ramallah, as well as the rebuilding of the Jericho road.