Britain and Israel have announced the creation of a new group tasked with “preparing the ground” for a post-Brexit trade deal.

In their first direct talks, Theresa May and Benjamin Netanyahu agreed to establish the UK-Israel Trade Working Group to build on a burgeoning trade relationship worth $6bn last year alone.

The two leaders also discussed opportunities to strengthen partnerships in research and development and tech at government, university and business level, according to a Number 10 spokesperson.

The announcement was welcomed by Hugo Bieber, Chief Executive of UK Israel Business, who said: “With trade levels between the UK and Israel at an all-time high, we see untapped opportunities for additional bilateral trade and investment between our two countries.

“The establishment of the UK-Israel Trade Working Group is a very positive step forward by our governments and UK Israel Business are here to continue to support businesses and investors from the UK and Israel”.

In March, UK Israel Business will be holding a summit in Tel Aviv, addressed by the Chief Economist of Investec Bank plc, to discuss the challenges and opportunities for Israelis presented by the UK’s impending exit from the EU.

Also on the agenda for the leaders’ working lunch was the peace process, with May reiterating the UK’s commitment to a two -state solution and opposition to settlement construction. On Iran, she stressed the nuclear deal must be enforced and policed “while recognising concerns about Iran’s pattern of destabilising activity in the region”, the Downing Street spokesperson said.

The pair discussed how to deepen cooperation on cyber security and May invited her British counterpart to join events taking place in the UK later this year to mark the centenary of the Balfour Declaration.