The agreement was signed by Russia's Sergei Lavrov and his Israeli counterpart, Tzipi Livni. It will come into force in 90 days' time, after all procedures have been finalized.
Vladimir Slutsker, a member of the Federation Council, the upper house of Russia's parliament, earlier said that of more than 2 million tourists who visited Israel in 2007, half a million were U.S. nationals followed by 250,000 French visitors. Russian tourists held third place with more than 100,000 people.
He said that visa-free travel between the two countries would be both economically useful and historically natural. Immigrants from Russia and other former Soviet republics account for over 1 million of Israel's 7 million citizens, meaning that visits to friends and relatives are likely to rise dramatically.
Lavrov is in Israel as part of a Middle East tour focused on reviving the peace process in the region.