In an interview with FOX Business’ Liz Claman, Israeli Prime Minister Benjamin Netanyahu discussed the newly-signed Israel-California business pact, saying the closer connection between the tech hubs will produce “unimaginable fruits of innovation.”

“Israel is an innovation nation … we have tremendous energy and vitality, and it’s my job to release that,” Prime Minister Netanyahu told Claman.

The prime minister, who has been touring Silicon Valley to meet with tech leaders this week, signed a strategic pro-business partnership with California Gov. Jerry Brown on Wednesday. The visit marks the first time an Israeli prime minister has visited the Golden State since 2006.

The governor and prime minister's offices released statements earlier that explained how the deal will enable Israeli companies to access the California Innovation Network, a system of 16 iHub business incubators that includes clusters of research parks, university and federal labs, economic development groups and venture capital funds.

"Through this agreement, California and Israel will build on their respective strengths in research and technology to confront critical problems we both face, such as water scarcity, cyber security and climate change," Brown said in the statement.

The pact seeks to boost economic, cultural and academic cooperation between the West Coast state and Israel, and place emphasis on water conservation, alternative energy, cyber security, biotechnology and agricultural tech, among other areas.

Netanyahu, who described himself as a “free-market champion,” told Claman that even though Israel is close to passing a limit to cash transactions, he is pro-deregulation. When Claman asked if that meant Israel would green-light Bitcoin, the prime minister fielded the question.

“There’s an area I would always be careful with and that is with banks and currency,” he responded.

When Claman asked Netanyahu about water conservation, he said “Israel should have a tremendous water problem” but explained that it does not because the country “solved the water problem” through recycling, creek irrigation and water techniques that help conserve water. In fact, the prime minister said Israel manages to recycle 95% of its water waste.

There are more than 150 Israeli start-ups based in Silicon Valley, and what’s more, the California Israel Chamber of Commerce has teamed up with Facebook (FB), Oracle (ORCL), Microsoft (MSFT) and eBay Inc.’s (EBAY) PayPal among others. In addition, Israel has the highest level of research and development spending relative to GDP in the world.

"Israel has demonstrated how efficient a country can be, and there is a great opportunity for collaboration," Brown said during a meeting at the Computer History Museum in Mountain View, Calif.

At the same meeting Netanyahu praised the tech region, saying “the best brains in the world are in Silicon Valley.”

Wednesday’s visit follows Netanyahu’s Monday meetings with President Barack Obama in Washington, D.C., shifting the focus away from the Israeli-Palestinian peace process and international efforts to prevent Iran from developing nuclear weapons.

However, Claman and Netanyahu did touch on diplomatic subjects including the crisis in Ukraine and Iran. Netanyahu said he hoped the situation in Ukraine would be resolved “quickly and amicably,” but said at the moment his priorities are on Iran.

Tuesday the prime minister made an appearance at the Los Angeles premiere of “Israel: The Royal Tour,” which is a part of a new documentary series by CBS where heads of state give tours of their nations and in which he is featured.

Netanyahu’s tour of the U.S. tech region includes a stop at Apple (AAPL) headquarters in Cupertino, visits with LinkedIn (LNKED) execs and a meeting with the co-founder of Facebook’s recent multibillion-dollar acquisition WhatsApp.

The Israeli leader said other tech hubs like Austin, Boston and New York City are on his radar, and that they would be “happy to have these pacts,” but that the focus is on Silicon Valley right now.

 

Follow Natalia Angulo on Twitter @natisangulorico.