German patrol boat to Israel
© Unknown
Germany has reversed an earlier decision to hold back a discount on missile boats to Israel over its settlement projects, agreeing to give Tel Aviv a USD 382 million (€300 million) discount.

Israeli media reported on Sunday that the crisis between Israel and Germany over a missile boats deal worth USD1.1 billion, that had been stalled because Germany refused to give Israel a 30-percent discount, has ended.

German and Israeli officials are expected to sign an agreement over the issue within weeks.

Germany was withholding the price cut over Israel's settlement activities in the occupied Palestinian territories.

It is not immediately clear what prompted German officials to change their mind.

But an Israeli Foreign Ministry official said German Chancellor Angela Merkel's personal commitment to "securing" Israel was a key to swinging the deal.

In May, Christoph Heusgen, German's national security adviser, said Tel Aviv should pay full price of the missile boats.

The presence and continued expansion of Israeli settlements in occupied Palestine has created a major obstacle for the efforts to establish peace in the Middle East.

More than half a million Israelis live in over 120 illegal settlements built since Israel's occupation of the Palestinian territories of the West Bank and East al-Quds in 1967.

The UN and most countries regard the Israeli settlements as illegal because the territories were captured by Israel in a war in 1967 and are hence subject to the Geneva Conventions, which forbids construction on occupied lands.