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Palestinian farmer Mahmoud Abu Shinar stands next to destroyed olive trees, near the West Bank village of Turmus Aya, north of Ramallah, on October 22, 2018. Image Credit: AFP

Ramallah: Israel and the Palestinian Authority (PA) have reached an agreement to end a five-month long trade dispute, officials said on Thursday.

The dispute, which opened a new front in the Israeli-Palestinian conflict, began in September when the PA announced a boycott of Israel calves. 

In response to the boycott, Israeli Defense Minister Naftali Bennett in January announced a halt to all agricultural imports from the PA, which in turn prompted the Authority to end imports of Israeli agricultural products.

Palestinians in the West Bank send over two-thirds of their farming exports to Occupied side of Palestine.

Israeli agriculture ministry said in a statment that the calves boycott affected around 400 cattle breeders, costing them a total of $70 million since October.

A final tit-for-tat move in the trade dispute came on Feb. 8, when Israel's defense ministry banned all Palestinian exports through Jordan, apparently in an effort to entice the Palestinian Authority to lift its ban on Israeli calves.

In a statement announcing the agreement, Israel's defense ministry said that "the calf boycott has been lifted, (and) trade with the Palestinian Authority will be restored accordingly".

The actions of the Palestinian Authority had in part reflected greater efforts to end what it sees as over-dependence on Israeli markets.

The Palestinian Authority prime minister's office said in a statement that under the agreement Israel would allow the PA to begin the "direct import of livestock, including calves, from all countries around the world without obstacles".

Bilateral tensions have been further fuelled by the announcement last month of U.S. President Donald Trump's Middle East peace plan and an ensuing string of violent incidents in Jerusalem, the West Bank and Gaza. Palestinians have rejected the proposal as favouring Israel.