A dispute between Israel and the Vatican (search) over Pope Benedict XVI's comments on terrorism appears to have been resolved, after Israeli Prime Minister Ariel Sharon sent a letter calling the pontiff "a true friend of Israel," Israel's ambassador said Friday.

Israel's top diplomat at the Holy See, Oded Ben Hur (search), brought the letter Tuesday to the Vatican secretary of state, Cardinal Angelo Sodano, in what the envoy called an "amicable and intimate" meeting that signaled that "we definitely see this thing behind us and are looking forward to improving our relationship."

The dispute erupted in July, when Israel complained that Benedict had deliberately failed to include a July 12 homicide bombing in Israeli in a list of countries recently hit by terrorist attacks, including Egypt, Britain, Turkey (search) and Iraq.

The two sides traded tit-for-tat pronouncements that culminated with a harshly worded Vatican statement saying the pope couldn't condemn every Palestinian homicide bombing because Israel would so often retaliate with illegal actions that would also have to be condemned.

In his letter, Sharon said Benedict's efforts to promote dialogue with Jews and Israel made him "a true friend of Israel, genuinely committed to advancing tolerance, understanding and reconciliation," Ben Hur said in a phone interview, reading from the letter. He said Sharon then explained the reasons for his country's reaction to the omission.

"Israel has been devastated and victimized by terrorism, and we are very sensitive to any attempt to distinguish between Islamic terrorism which systematically targets innocent Israeli civilians and that which is aimed at citizens of other countries," Sharon wrote.

Sodano expressed his satisfaction with the letter during Tuesday's meeting, saying both sides had made mistakes and that he was happy to put the issue behind him, Ben Hur said. The letter also invited Sodano to visit Israel.

Ben Hur said Sodano had told him the omission of Israel was unintentional, the result of hastily prepared remarks.

The Vatican declined to comment on the matter Friday. But the Italian daily Corriere della Sera, which first reported on Sharon's letter, quoted the Vatican's envoy to Israel, Archbishop Pietro Sambi, as saying he was pleased with the "positive outcome of the issue."

Ben Hur denied the newspaper's claim that Sharon had acknowledged in the letter that Israeli officials had reacted too aggressively to the pope's omission.

But the ambassador said Sharon's letter did include a crucial pledge to revitalize stalled talks on formalizing the church's tax exempt status in Israel, as called for by a 1994 agreement. Frustration over the prolonged talks was said by many analysts to have contributed to the rift.

Sharon wrote that he has instructed government officials to do everything possible to reach a quick conclusion to the talks, but he also urged the Vatican to do its part.

Israel's two chief rabbis will meet with the pope Sept. 15. Ben Hur said the meeting has been in the works for some time and was scheduled to coincide with commemorations marking the 40th anniversary of the Vatican's Nostra Aetate declaration that revolutionized its relations with Jews.

The ambassador said he proposed the meeting "to thank the church, because this was not just a major point in the relation between Jews and Christians, but it also paved the way for the recognition of Israel."

The two sides are working on a joint statement to be issued after the meeting. Israel hopes it will include "a mutual condemnation of terrorism, of which also Israel has suffered so much," Ben Hur said.