The Finance Ministry said on Thursday it had reached an understanding with port workers to end a strike at the country's two main harbours of Haifa and Ashdod, where about 70 cargo vessels await entry.

The ministry said in a statement that although details remained to be worked out, the sides had agreed to a proposal where the the semi-governmental Ports Authority would set up a number of separate companies to encourage competition.

The new companies will not be formed until after the sides sign new contracts that guarantee workers' rights and pay.

"In a couple of hours, the (strike) will come to an end," said a spokesman for Israel's Ports Authority.

He said it would take until Friday before the ports were fully up and running.

Israel's Manufacturers' Association said the three-week strike cost the business sector about NIS 500 million ($125 million).