The Palestinian National Authority (PNA) is currently in negotiations with Israel, seeking permission to develop natural gas fields off the coast of the Gaza Strip, report Reuters.
The development may ease PNA's fiscal crises caused by shortfalls in international aid.
Peace envoy and former UK Prime Minister Tony Blair has initiated the talks on behalf of PNA, which will levy tariffs on any revenues generated from private pumping in the earmarked area.
The Israeli Foreign Ministry, in a report, said: "Development of the Gaza Marine gas field will generate revenues that could contribute dramatically to Palestinian fiscal sustainability."
Tony Blair's spokeswoman Ruti Winterstein said Blair had secured Israeli Prime Minister Benjamin Netanyahu's approval in February 2012 for the talks, which took place recently.
"The (gas) field itself will take around three or four years to develop," Winterstein said, while adding talks were at a preliminary stage.
"Two private partners, Consolidated Contractors Company (CCC) and BG Group, would develop the gas field and hand over the royalties and the taxes to the PA under the supervision of Prime Minister Fayyad."
Israel has been developing its own gas fields in the Mediterranean to secure its energy independence; it earlier secured 40% of its gas from neighbouring Egypt, which is marred by political instability and pipeline sabotage. Isreal currently keeps Gaza under close maritime blockade.
Tony Blair is a representative of a so-called Quartet of Middle East peace brokers - the United States, European Union, Russia and the United Nations, reports Reuters.
Image: Peace envoy and former UK Prime Minister Tony Blair. Photo courtesy of: World Economic Forum.