JERUSALEM — Israel’s government on Sunday began examining a plan for a rail link between its Mediterranean and Red Sea coasts, offering a new route for Europe-Asia trade that could compete with the Suez Canal.

Prime Minister Benjamin Netanyahu said a passenger line through the desert would for the first time put Israel’s southern Red Sea resort of Eilat a two-hour rain ride from Tel Aviv, 350 kilometres (220 miles) away.

 “In addition there will be a line for carrying goods from Asia to Europe,” Netanyahu told a meeting of his cabinet. “It has created very great interest in among the emerging powers, China and India, and others.”

He said that new rail and road networks would join the Eilat line to northern Israel and also become “a junction between continents.”

“It is therefore of strategic importance, both nationally and internationally,” he said, adding Sunday’s discussion would be the first of at least two on the subject.

Of the proposals prepared by the transport ministry, the preferred option was for the work to be done by Chinese state-owned contractors, the ministry’s website says.

“The professional capability of the Chinese companies in the construction of railway systems and transport networks is among the best in the world,” the site quoted transport minister Yisrael Katz as saying. Read more