India and Israel have vowed to deepen cooperation in counter terrorism, water conservation and agriculture, widening the scope of a bilateral relationship that has come out of the shadows with Indian Prime Minister Narendra Modi's historic visit to Israel.

He is the first Indian prime minister to visit Israel, even though the two countries established diplomatic ties 25 years ago.

Mr Modi held talks on Wednesday (July 5) with his Israeli counterpart Benjamin Netanyahu, with both sides signing half a dozen agreements, including those on space cooperation and the setting up of a US$40 million innovation fund to promote research and development in technological innovations and agriculture. They also discussed closer counter terror cooperation.

"India has suffered first hand the violence and hatred spread by terror. So has Israel. Prime Minister Netanyahu and I agreed to do much more together to protect our strategic interests and also cooperate to combat growing radicalisation and terrorism, including in cyber space," said Mr Modi, who wraps up his three-day visit on Thursday. (July 6)

After the talks, the two leaders met Moshe Holtzberg, an Israeli boy rescued from the Chabad-Lubavitch Jewish centre in Mumbai during a 2008 terrorist attack during which his parents were killed.

"We also face common challenges and the first of it is to fight terror," said Mr Netanyahu, who invited the 11-year old boy to join him when he visits India. Mr Modi has invited the Israeli leader to visit India, with dates to be fixed.

Mr Modi has been accorded a very warm welcome in Israel, which is keen to woo one of the world's fastest-growing economies.

In a sign of the importance accorded to the visit, Mr Netanyahu accompanied Mr Modi on many engagements, including a visit to the Holocaust Memorial on Tuesday (July 4).

Israel also named a new variety of chrysanthemum flower after Mr Modi.

Said Mr Netanyahu: "We are making history together... It is a marriage made in heaven and we are implementing it on earth."

While India has continued to express support for Palestine, ties between India and Israel have been growing steadily, with security and defence cooperation at the heart of the relationship.

In the area of defence, India and Israel would "focus on joint development of defence products, including transfer of technology from Israel'', said a joint statement released on Wednesday (July 5) after the talks.

India is a big defence market for Israel. Delhi recently agreed to buy about US$2 billion worth of Israeli missiles and air defence systems, the largest order in Israel's history, experts said.

Israel has quietly supplied India with arms including during the 1999 Kargil war with Pakistan.

But past Indian governments have been cautious about highlighting ties with Israel, given concerns about a political fallout with Muslims in India and effects on ties with the Gulf states, where more than seven million Indians live and work.

Mr Modi, whose Bharatiya Janata Party has always supported close ties with Israel, has been keen to ramp up the engagement with the country since coming to power.

His high-profile visit, analysts said, has lifted the veil of secrecy surrounding the relationship between the two countries.

With the Palestinian issue becoming less dominant in West Asia, which has other troubles, the political risks of Mr Modi's visit to Israel are minimal at this stage, said Mr Lalit Mansingh, a former Indian foreign secretary.

"In any case, India has maintained that its relationship with Israel will not impact its stand on the Palestinian issue. Mr Modi has taken the precaution of inviting the Palestinian President to India just a couple of months ago,'' he added.

"Coming out makes sense," he said, noting Israel is supporting India's counter terrorism efforts.

He said: "We still need defence technology. We still need strong support in intelligence cooperation. And for Israel, this is a big political victory.''