India and Israel have pledged 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.

Mr Modi is the first Indian prime minister to visit Israel, although the two countries established diplomatic ties 25 years ago.

He held talks with his Israeli counterpart Benjamin Netanyahu yesterday, with both sides signing half a dozen agreements, including on space cooperation, and setting up a US$40 million (S$55 million) innovation fund to promote research and development in technological innovations and agriculture.

On closer cooperation in counter-terrorism efforts, Mr Modi said: "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 cyberspace."

After the talks, the two leaders met Moshe Holtzberg, a 11-year-old Israeli boy who was rescued from the Chabad-Lubavitch Jewish centre in Mumbai during the 2008 terror attacks, in which his parents were among those killed.

"We also face common challenges, and the first of it is to fight terror," said Mr Netanyahu.

Mr Modi invited the Israeli leader to visit India, with dates to be fixed, and Mr Netanyahu invited the boy to join him on the visit.

Mr Modi has been accorded a 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.

Israel also named a new variety of chrysanthemum after Mr Modi, who wraps up his three-day visit today.

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 plan to "focus on the joint development of defence products, including transfer of technology from Israel", said a joint statement released yesterday after the talks.

India is a big defence market for Israel - India 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 the impact on ties with the Gulf states, where over seven million Indians live and work.

Mr Modi's Bharatiya Janata Party has always supported closer ties with Israel, and has been keen to ramp up the engagement with Israel since coming to power.

Mr Modi's high-profile visit, analysts said, has lifted the veil of secrecy that shrouded the ties 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 former Indian foreign secretary Lalit Mansingh.

He said: "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."

"Coming out makes sense," he added, noting that Israel is supporting India's counter-terrorism efforts. "We still need defence technology. We still need strong support in intelligence cooperation. And for Israel, this is a big political victory."