Israel will build a 100 billion shekel ($27 billion) rail expansion that will connect its outlying areas to metropolitan Tel Aviv and, in the future, could provide overland links to Saudi Arabia, Prime Minister Benjamin Netanyahu said on Sunday.

The announcement followed a trip by top US officials to Saudi Arabia last week to advance a possible forging of formal relations between the Muslim powerhouse and Israel.

A senior Israeli lawmaker said that any forging of relations with Saudi Arabia did not appear imminent, despite US President Joe Biden prediction last week of a possible rapprochement between the Middle East powers.

“I think it's too early to talk about a deal being in the works,” Yuli Edelstein, head of the Knesset Foreign Affairs and Defense Committee and a senior member of Netanyahu’s Likud party, told Israel’s Army Radio.

Opening the weekly Israeli cabinet meeting, Netanyahu appeared to sidestep the constitutional crisis that has roiled the country for seven months, denting its economy and shaking Western allies’ confidence in its democratic health.

Instead, he promoted infrastructure initiatives including the “One Israel Project,” which he described as designed to reduce travel time by train to the country’s business and government centres to two hours or less.

“I would like to add that in the future we will also be able to transport cargo by rail from Eilat to our Mediterranean and will also be able to link Israel by train to Saudi Arabia and the Arabian peninsula,” he said in televised remarks.

“On this, too, we are working.”