The conclusion of the latest agreement between the Vatican and Israel heralds another milestone on a remarkable journey, not just of diplomatic normalisation but of reconciliation between the Catholic Church and the Jewish people.

The radical revision of official church teaching towards Jewry was ushered in by Pope John XXIII and the Second Vatican Council, which he convened. This produced the historic document known by its first two works, Nostra Aetate, that not only condemned any particular charge of deicide against the Jews and also condemned anti-Semitism but, furthermore, affirmed the eternity of the divine covenant with the Jewish people.

This set the stage for subsequent notable advances in Catholic approaches towards Judaism and Jewry, and eliminated the basis of any theological opposition to the reestablishment of the Jewish State.

However, political factors related to the church's communities and interests in the Middle East, in particular, delayed that diplomatic normalisation for almost 30 more years. In the wake of the Madrid Peace Process, the Vatican and Israel established a bilateral commission to explore and recommend the formula for full normalisation between the two. This led to the historic signing of the Fundamental Agreement between the Holy See and the State of Israel at the end of 1993, which was crowned a few months later in an exchange of ambassadors.

That concordat opened with a remarkable preamble which placed it in the context of "the historic process of reconciliation between the Catholic Church and the Jewish People". Indeed, just as the Holy See represents more than the Vatican State in this accord, and "speaks" on behalf of the whole Catholic Church, so Israel here represents more than the state and "speaks" on behalf of the Jewish people as a whole.

Accordingly, this agreement did indeed have a profoundly positive impact upon Catholic-Jewish relations throughout the world. It also meant much more than just a diplomatic normalisation, but rather served as the basis for a special relationship between the Holy See, the Catholic Church and the State of Israel, in which the latter undertook to give "full legal effect" - that is to say, de jure recognition - to the Catholic Church's authority in the Holy Land.

To understand the significance of this, it needs to be pointed out that since Ottoman times, the local Christian churches had enjoyed certain status and privileges, granted by the magnanimity of the ruling authority. In the Fundamental Agreement, Israel committed itself not only to the de jure confirmation of those rights pertaining to the Catholic Church's educational and philanthropic institutions, but also to enshrine the authoritative structure of the Catholic Church's hierarchy and religious orders in Israeli law. To do so required Israel to formulate a special statute and it was understood and agreed upon by the parties that it would take a couple of years to work this out.

The agreed formula has now been ratified and it is a dramatic step without precedent. For, wherever in the world arrangements exist between states and the Catholic Church, the latter is authorised to register its various bodies under the laws of the country like secular non-profit organisations. Israel has gone way beyond such arrangement and has provided special legal status for the Catholic Church and its internal structure in which "full effect" is given to Canon Law.

As a result, the Holy See is given precise legal jurisdiction under Israeli law over its own institutions and assets in the Holy Land. This, as indicated, is a historic precedent, as no ruling authority in the Holy Land - especially not a non-Christian power - has ever granted any church such de jure status. It has, moreover, been obtained in a country in which Christianity in general and Catholicism in particular constitutes a very small minority.

In accordance with this legal recognition of the internal structure and authority of the Catholic Church in the Holy Land, a special register of some 130 ecclesiastical bodies and organisations has been drawn up. Any disputes, transactions, etc., pertaining to them will, accordingly, now be fully adjudicated and resolved under and by Israeli law. This, of course, is a remarkable vote of confidence in Israeli law on the part of the Holy See, the significance of which in terms of regional interests cannot be minimised. It also serves as something of a model for the Holy See, which undoubtedly would wish to achieve a similar agreement with other states and national organisations in the region, to safeguard it interests with them as well.

However, it achieved this agreement with Israel precisely because the latter is not a theocracy but a modern democracy committed, both through its Declaration of Independence and under the law of the land, to the principle of freedom of religion for all the faith communities in the country. Indeed, this agreement, which will be followed by the necessary legislation and regulations, serves as eloquent testimony of the maturity of Israeli democracy and the commitment of the state to the development of a society in which all the different communities in the Holy Land may live freely and flourish.

Rabbi David Rosen is the director of the Israel Office of the Anti-Defamation League and co-liaison officer to the Holy See.