The Spanish city of Barcelona will host the headquarters of the embryonic 43-nation Mediterranean Union.
The decision was announced on Tuesday at a meeting of foreign ministers from the union's participating countries in Marseille, southern France.
The union embraces 27 EU states and countries in the Middle East and North Africa. Joint work is planned in areas such as water, energy and education.
France's President Nicolas Sarkozy launched the union at a summit in July.
Barcelona was the site of a previous EU-led Mediterranean initiative, called the Barcelona Process.
"It is normal that at the start you have a lot of tension, but in the end a good result is found"
Arab-Israeli tensions dogged that process, but diplomats say a compromise deal was reached on Tuesday.
Despite its initial opposition, Israel finally agreed to the Arab League participating "at all levels" of the union, provided an Israeli was appointed as one of five deputy secretary generals, Reuters news agency reported.
The secretary general has not yet been named.
The union is being co-chaired by Mr Sarkozy and Egyptian President Hosni Mubarak.
Mr Sarkozy has said the new grouping will help "build peace in the Mediterranean".
^ Back to top | BBC Sport Home | BBC Homepage | Contact us | Help | ©
~RS~q~RS~~RS~z~RS~44~RS~)