The Vatican has signed a treaty with the "State of Palestine" and said it hopes the official recognition will help stimulate peace with Israel.

Vatican Foreign Minister Paul Gallagher and his Palestinian counterpart, Riad al-Malki, signed the treaty at a ceremony Friday in the Vatican.

Israel had expressed its disappointment when the Vatican announced last month that it had reached final agreement with the "State of Palestine" on the treaty regulating the life of the Catholic Church in the Palestinian territories.

Gallagher said he hoped the Vatican's recognition "may in some way be a stimulus to bringing a definitive end to the long-standing Israeli-Palestinian conflict." He added the treaty could be a model for other Mideast countries.

It marks the first legal recognition by the Vatican of the Palestinian state.