JERUSALEM (Reuters) - Officials from Israel and Bahrain said on Monday that the two countries hope to conclude a free trade agreement before the end of the year.

Israel normalized diplomatic relations with Bahrain and its Gulf neighbor, the UAE, two years ago, under US auspices. While economic relations with the UAE have developed since then, Israel's trade with Bahrain has not followed suit.

The Bahraini Minister of Industry and Trade, Zayed Al-Zayani, said during a visit to the Israeli venture capital company (Jerusalem Venture Partners JVB) that he was optimistic and hoped to conclude the agreement by the end of the year.

Al-Zayani, who discussed future cooperation with JVB founder Ariel Margalit, said another round of free trade talks is expected in mid-November.

The Israeli Economy Ministry told Reuters it would send a delegation to Manama for the next round "in order to conclude the negotiations as soon as possible and hopefully no later than the end of the year."

In May, Israel signed a free trade agreement with the UAE, its first with an Arab country, that officials estimate will increase trade from $1.2 billion to $10 billion over the next five years.