The Israeli and the Palestinian national committees of the International Chamber of Commerce (ICC) signed an agreement on Wednesday to establish a center for arbitration between Palestinian and Israeli businesses.

"The commerce between Israel and the Palestinians is huge – about $20 billion annually. The Jerusalem Arbitration Center (JAC) will lead to mutual security of transactions and to doubling of the volume of commerce within five years," ICC Israel President Oren Shachor told Calcalist.

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The JAC will be headed by Shachor and by Palestinian businessman Munib al-Masri, president of ICC Palestine, who led the initiative.

They will be joined by Turkish Rıfat Hisarcıklıoğlu, who is also an ICC board member, and by John Beechee, president of the ICC Court.

Hisarcıklıoğlu, chairman of the Turkish Trade Ministry and president of the Turkish Foreign Trade Authority, is considered the Turkish president's right hand and one of the senior figures in the Turkish economy.

Shachor believes the choice of a Turkish representative is a sign of easing of the tensions between Israel and Turkey.

"We offered Hisarcıklıoğlu to join even before the dispute between us and the Turks was over, as he's a very senior figure in Turkey and an associate of the president.

"We wanted someone from Turkey because we don't have too many neighbors we get along with, and in the past there were very good relations with Turkey, which I hope will be renewed.

"The Turks share economic and general interests with Israel – trade between the two countries is significant," he added. According to the Export Institute, in 2012 Turkey was Israel's seventh largest trade partner, amounting to $3.5 billion.

The JAC will function as an independent institution for legal arbitration specializing in the resolution of commercial disputes between Israelis and Palestinians.

The Center will base its decisions on the ICC Court guidelines and procedures, including a mutual commitment by Israeli and Palestinian authorities to uphold its rulings and enforce them.

Shachor said that the Palestinian government and legal system have pledged to respect the arbitration's rulings. The cases will reach the Center through agreed upon clauses in contracts between Israeli and Palestinian firms, which will determine which disputes will be referred to the JAC.

Shachor added that at first the Center will go through a trial-run and focus mostly on small businesses: "These businesses are mostly run in cash since transactions between Israelis and Palestinians carry a lot of risk, and this is a way to insure the deal.

"Once the JAC will get in there, and the matters will be enforced, this will give legal and commercial insurance to the transactions."

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