Information Technologies Minister Leonid Reiman said Prime Minister Mikhail Fradkov had met with Israeli Deputy Prime Minister Ehud Olmert after a session of a Russian-Israeli inter-governmental commission. The Russian premier had said that bilateral military and technical cooperation was developing positively.
At the same time, Reiman said there were problems in bilateral relations.
"As compared with other sectors, there are problems with investment protection," he said. "We have been discussing the text of an agreement for five years, but two points have become a stumbling blocks."
According to the Russian minister, Israel and Russia agreed to set up a special working commission on solving problems in the field of protecting investment in both countries.
Reiman expressed his hope that Russia and Israel would sign a space cooperation agreement this fall. "At any rate, there is a good chance that this will happen," he said.
"Both countries have positive dynamics and we believe that the breakthrough moment has come in this sphere," the minister added.
Reiman said that the most interesting project was an agreement signed by Israel with Russia's largest diamond company Alrosa, which produces 20% of the world's diamonds, on the delivery of uncut diamonds.
In addition, Russia's postal service and an Israeli company signed an agreement on the construction of ground-based satellite equipment stations to provide communications and telephony to remote Russian regions.
According to Reiman, bilateral trade is worth $1.65 billion. However, Russia is not happy that oil deliveries dominate its exports to Israel.
But the minister said Israel's recognition of the guarantees of 10 Russian commercial banks was a positive sign.