Microsoft CEO Steve Ballmer, visiting Israel on Monday, met with Finance Minister Yuval Steinitz in Jerusalem to discuss expanded cooperation between the Israeli government and the global high-tech giant.

The two men agreed on a memorandum of understanding on information and communications technology, to be signed within a few days by government Chief Information Officer Carmela Avner and Microsoft Israel CEO Danny Yamin.

The agreement sets the stage for Microsoft’s involvement in various IT aspects of government operations, including technological development and innovation, open government promotion, database management, data protection and privacy issues, information sharing and e-government services.

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The agreement is intended to develop “shared infrastructure investment” in national information technology projects, and encourage interdependent Israeli technology companies and start-ups.

“Technological innovation and incubation are the driving force behind Israel’s dynamic economy,” Ballmer said. “Microsoft is proud to work in an environment that nurtures innovation and has created such a large number of successful technology companies.”

Ballmer also met on Monday with Prime Minister Benjamin Netanyahu, who said: “The combination of the State of Israel and Microsoft is natural, since the Israeli high-tech industry is among the world’s leaders. Microsoft was wise enough to see its potential many years ago and to benefit from the quality personnel in Israel… I believe that cooperation between the State of Israel and Microsoft will continue for many years.”

Microsoft first opened an R&D center in Israel in 1991, and has since expanded their operations to locations in Haifa and Herzliya, employing some 400 people. Ballmer was scheduled to address Microsoft Israel’s annual ThinkNext conference on Monday evening in Tel Aviv.