Israel signed an agreement with the European Union on Sunday that opens the way for billions of dollars in funding for scientific research and innovation.

Prime Minister Benjamin Netanyahu and European Commission President Jose Manuel Barroso attended the ceremony in Jerusalem where EU Ambassador to Israel Lars Faaborg-Andersen and Israel’s Science, Technology and Space Minister Yaakov Peri signed the Horizon 2020 deal.

“This is proof of the power of Israeli science and its importance to the future of the State of Israel,” Peri said. “Our joining the program is significant news for Israeli science and will bring stronger scientific connections with Europe and to hundreds of generous research grants for researchers in Israel.”

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Horizon 2020 is one of the largest scientific and industrial cooperation programs in the world with nearly €80 billion ($ 109 billion) available in funding and grants for research and development.

Israel’s participation in the program was threatened by EU guidelines published last year that denied any kind of financial support for Israeli projects based outside the country’s internationally recognized borders — effectively excluding institutions and organizations in the West Bank and East Jerusalem from funding. Jerusalem feared that signing on to the Horizon 2020 cooperation agreement would be akin to an admission that territories beyond the Green Line were not part of the State of Israel.

In November 2013, Justice Minister Tzipi Livni finally hammered out an agreement with EU officials enabling both sides to maintain their positions but still work together. According to a Channel 2 report at the time, Israel added a clause stating that it does not accept the EU’s definition of territory beyond the 1967 lines.

Published in July, the EU guidelines mandated a denial of European funding to, and cooperation with, Israeli institutions based or operating over the Green Line, and a requirement that all future agreements between Israel and the EU include a clause in which Israel accepts the position that none of the territory over the Green Line belongs to Israel.

Jerusalem rejected the territorial clause and proposed an amended version of the guidelines that accepts the EU’s position on ineligibility of funding for settlements but would prevent Israel from explicitly endorsing such a standpoint, Israeli diplomatic sources told The Times of Israel at the time.

Horizon 2020 covers the period from 2014-2020 and will see Israel contribute €140 million ($191 million) per year with an expected relative return of 60%. In a previous, similar plan that ended last year, Israel contributed €535 million while receiving €840 million ($1.1 billion) in grants for some 1,197 projects, most of which were university scientific research.