Latin American trade bloc Mercosur offered the Palestinian Authority a free trade pact months after many of the U.N. member governments gave the Palestinians recognition as a future state.

Mercosur has been seeking free trade accords with the European Union but the latest announcement gives the Latin American bloc a special place as the first group of nations outside the Arab world to clinch preferential commercial deal with the Palestinians.

At least 128 -- 66 percent -- of the 193 member states of the United Nations have recognized a future state of Palestine. Many of the countries that don't recognize a state of Palestine recognize the Palestine Liberation Organization as the "representative of the Palestinian people."

Palestinian foreign affairs head Riyad al-Maliki signed the agreement on behalf of the Palestinians, and thanked Brazil, Argentina, Uruguay and Paraguay for having recognized the Palestinian territories as a sovereign and independent nation.

The signing took place during the organization's presidential summit in Montevideo.

Maliki said the accord would help the Palestinians.

"We hope that (the Mercosur countries) can help us end the suffering of the Palestinian people and reach a peace agreement between Palestine and Israel," he said. "We are glad to know we have so many friends in the region."

In the West Bank town of Beit Jala, near Bethlehem, Palestinian chief negotiator Saeb Erekat called the agreement very important to Palestinian institution-building but warned that Israeli controls are stifling his people's economy.

Talks on the free trade agreement began about a year ago. Aside from the growing political support for the Palestinian side in Latin America, Mercosur has also set sights on the Middle East as a major potential trade partner. The deal with the Palestinians gives Mercosur a much needed entry into an area of lucrative commercial possibilities.

Latin America's trade with the Arab Middle East is growing but Argentina remains the only significant partner. Argentina is also host to one of the largest Jewish communities in Latin America.

The Palestinians have free trade agreements with the European Union, Turkey and all Arab nations, while Mercosur has a free trade agreement with Israel that came into effect in March.

Israeli officials described the accord as unhelpful to the Middle East peace process but Mercosur has indicated its wants to get more closely involved with any search for an Arab-Israeli settlement.

Analysts said the Mercosur deal could be significant because it would give Latin American partners a first-hand experience of trade conditions in the Palestinian territories.

The deal could be symbolic unless Israel eased terms for Palestinian imports and exports involving the West Bank and Gaza Strip, analysts said.