As a result of high-level talks between government officials since the beginning of the year, Tel Aviv is understood to have agreed in principle to take a 30 per cent stake in the scheme. 'The situation with Israel and the intifada has obviously made people sceptical about such a scheme,' says a local contractor. 'But behind the scenes this actually seems to be going forward.'

Vivendi Waterof France is understood to have presented terms of reference to the Jordanian government with a view to preparing a pre-feasibility study for the scheme, which will involve construction of a canal to transport water from the coast at Aqaba to the Dead Sea. Water extraction from the Jordan River has reduced the level of the inland sea considerably in the last few years, with acute water salinity affecting agriculture and industry in the region. Provisional plans for the canal also include a proposed hydroelectric power generation plant and desalination units.