OCCUPIED JERUSALEM: Israel established diplomatic relations with the Himalayan kingdom of Bhutan on Saturday, the Israeli foreign ministry said, the latest in a string of normalisation deals agreed by the Jewish state.

"The circle of recognition of Israel is widening," Israeli Foreign Minister Gabi Ashkenazi said in a statement.

"The establishment of relations with the Kingdom of Bhutan will constitute a new stage in the deepening of Israel's relations in Asia."

Israeli Prime Minister Benjamin Netanyahu hailed the agreement, saying in a statement that Israel was "in contact with other countries that want to establish relations with" the Jewish state. The deal with Bhutan comes days after Morocco agreed to normalise relations with Israel, the fourth Arab state to do so since August. According to some analysts, other countries could follow, including Saudi Arabia, Oman and some Asian countries traditionally opposed to Israel, such as Indonesia.