Israel and Egypt are nearing a compromise that would sweep away a major obstacle to a multibillion-dollar natural gas deal. Israel may agree to settle for half of the $1.73 billion fine Egypt was ordered to pay it so talks on exporting Israeli offshore gas there can go ahead, two people familiar with the negotiations said, requesting anonymity because the talks are private.

Deals between Egyptian and Israeli companies had been in the works when an international arbitration court in December ordered Egypt to pay Israel damages for violating a contract to supply Israel Electric with Egyptian gas.

U.S.-based Noble Energy Inc. and Israel's Delek Group Ltd., the lead partners in the Leviathan field, need export contracts with Egypt to obtain financing to develop it.

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