Cars form a tailback in Bhutan's capital Thimphu on April 19. Photo: AFP

Israel established diplomatic relations with the Himalayan kingdom of Bhutan on Saturday, the Israeli foreign ministry said, the latest in a string of normalization deals agreed by the Jewish state.

"The circle of recognition of Israel is widening," Israeli Foreign Minister Gabi Ashkenazi said in a statement.

"The establishment of relations with the Kingdom of Bhutan will constitute a new stage in the deepening of Israel's relations in Asia."

Israeli Prime Minister Benjamin Netanyahu hailed the agreement, saying in a statement that Israel was "in contact with other countries that want to establish relations with" the Jewish state.

The deal with Bhutan comes days after Morocco agreed to normalize relations with Israel, the fourth Arab state to do so since August.

According to some analysts, other countries could follow, including Saudi Arabia, Oman and some Asian countries traditionally opposed to Israel, such as Indonesia.

Ron Malka, the Israeli Ambassador to India, said he signed the agreement with his Bhutanese counterpart Major General Vetsop Namgyel on Saturday to establish "formal diplomatic relations," calling it a "historic day."

"This agreement will open up many more opportunities for cooperation for the benefit of both our peoples," Malka said on Twitter.

Photographs he posted showed officials from the two countries signing documents and shaking hands with beaming smiles at the Israeli Embassy in New Delhi.

A joint statement on the deal said key areas of cooperation between the two countries would include economic, technological and agricultural development.

It added that "the ties between the peoples through cultural exchanges and tourism would also be further enhanced."

Israel has supported Bhutanese "human resource development since 1982, especially in the area of agriculture development that has benefitted hundreds of Bhutanese youths," according to the statement, which highlighted the "cordial" relations maintained between the countries despite a lack of formal ties.

The Buddhist Kingdom of Bhutan, a country of less than a million people, is wedged between giant neighbors. It has tried to shield itself from the downsides of globalization, striving for "Gross National Happiness" over GDP growth.

AFP