Qatar has become the first Gulf state to donate money inside Israel by giving $6m to build a sports complex in the northern Israeli town of Sakhnin.
Bnei Sakhnin's cup win became a matter of pride for Arab Israelis
The Qatari Olympic Committee agreed to fund the centre, including a football stadium, in the mainly Arab town.
Hapoel Bnei Sakhnin became a national sensation when it won the Israeli cup in 2004.
Gulf states have donated to and invested in the Palestinian areas, but not Arab towns in Israel.
The emirate has no diplomatic relations with Israel, but has maintained low-level ties.
The head of the Qatar National Olympic Committee, Sheikh Saud bin Abdel Rahman Al Thani, signed the deal in Doha on Monday with an Israeli delegation headed by Israeli Arab Knesset member Ahmad Tibi.
"This is the largest financial support that Sakhnin has ever received or any others in the Arab sector, from any outside source," Mr Tibi told the Associated Press.
"This part of the Palestinian people has been neglected for more than 50 years by the Arab world," he added.
Work on the new 13,000-seater Doha Stadium will be closely supervised by Qatari officials.
The town celebrated in 2004 when its mixed Jewish-Arab team, Bnei Sakhnin, the poorest club in the league, won Israel's State Cup and earned a place in UEFA Cup.
The team's run ended in the competition's first round when it lost 7-1 on aggregate to English Premiership team, Newcastle United.
Bnei Sakhnin are currently bottom of the Israeli league and without a point from three games.