President Joe Biden on Tuesday said the U.S. has brokered a “historic breakthrough” between Israel and Lebanon that would end a dispute over their shared maritime border, pave the way for natural gas production and reduce the risk of war between the enemy countries.

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The agreement, coming after months of U.S.-mediated talks, would mark a major breakthrough in relations between Israel and Lebanon, which formally have been at war since Israel’s establishment in 1948. But the deal still faces some obstacles, including legal and political challenges in Israel.

Israel welcomed the deal even ahead of Biden’s announcement. Lebanese leaders made no formal announcement, but indicated they would approved the agreement.

In Washington, Biden said that Israel and Lebanon had agreed to “formally end” their maritime dispute. He said he had spoken to the leaders of both countries and been told they were ready to move ahead.

The agreement “will provide for the development of energy fields for the benefit of both countries, setting the stage for a more stable and prosperous region,” Biden said. “It is now critical that all parties uphold their commitments and work towards implementation.”

Lebanon and Israel both claim some 860 square kilometers (330 square miles) of the Mediterranean Sea. At stake are rights over exploiting undersea natural gas reserves. Lebanon hopes gas exploration will help lift its country out of its spiraling economic crisis. Israel also hopes to exploit gas reserves while also easing tensions with its northern neighbor.

Israeli Prime Minister Yair Lapid called the deal a “historic achievement that will strengthen Israel’s security, inject billions into Israel’s economy, and ensure the stability of our northern border.”

Under the agreement, the disputed waters would be divided along a line straddling the strategic “Qana” natural gas field.

Israeli officials involved in the negotiations said Lebanon would be allowed to produce gas from that field, but pay royalties to Israel for any gas extracted from the Israeli side. Lebanon has been working with the French energy giant Total on preparations for exploring the field, though actual production is likely years away.

The agreement would also leave in place an existing “buoy line” that serves as a de facto border between the two countries, the officials said.

The officials, speaking on condition of anonymity because they were discussing behind the scenes negotiations, said the deal would include American security guarantees, including assurances that none of the gas revenues reach Hezbollah.

Many leading Israeli security figures, both active and retired, have hailed the deal because it could lower tensions with Lebanon’s Hezbollah militant group, which has repeatedly threatened to strike Israeli natural gas assets elsewhere in the Mediterranean.

With Lebanon now having a stake in the region’s natural gas industry, experts believe the sides will think twice before opening up another war.

“It might help create and strengthen the mutual deterrence between Israel and Hezbollah,” said Yoel Guzansky, a senior fellow at Israel’s Institute for National Security Studies. “This is a very positive thing for Israel.”

Israel and Hezbollah fought a month-long war in 2006, and Israel considers the heavily armed Iranian-backed group to be its most immediate military threat.

The agreement will be brought before Israel’s caretaker government for approval this week ahead of the Nov. 1 election, when the country goes to the polls for the fifth time in under four years.

An Israeli official said Lapid’s Cabinet is expected to approve the agreement in principle on Wednesday, while sending it to parliament for a required two-week review. After the review, the government would give final, official approval, the official said, speaking on condition of anonymity to discuss government strategy. It remains unclear if parliament needs to approve the agreement, or merely review it.

Senior U.S. energy envoy Amos Hochstein, whom Washington appointed a year ago to mediate talks, delivered a modified proposal of the maritime border deal to Lebanon on Monday night, according to local media and officials.

There was no formal response from Lebanon. But the office of President Michel Aoun said the latest version of the proposal “satisfies Lebanon, meets its demands, and preserves its rights to its natural resources,” and will hold consultations with officials before making an announcement.

Hezbollah’s leader, Hassan Nasrallah, was noncommittal in a speech late Tuesday. He praised his group’s “resistance” against Israel and insisted that Lebanon is not afraid of another war against Israel. But he said Hezbollah would “wait” to issue its position on the agreement. Previously he has said the group would endorse the government’s position.

He said any agreement would require cooperation and unity among Lebanon’s fractured political leadership. “The upcoming hours are decisive,” he said.

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