A handshake between an Israeli politician and a Saudi prince settled an unusual public diplomatic spat on Saturday about the seating arrangements at an international security conference.

To applause from the audience at the Munich Security Conference, a global gathering of defence, security and diplomatic chiefs, Israeli Deputy Foreign Minister Danny Ayalon and Saudi Arabia's Prince Turki al-Faisal smiled and shook hands in a display of diplomatic good manners.

'There is a chance,' Ayalon said, apparently referring to prospects for a more peaceful region. 'I am very glad.'    

Ayalon had accused Turki, a former Saudi intelligence chief and envoy to Washington and London, of orchestrating a decision to keep him off a panel involving other regional powers meant to discuss the security of the Middle East.

The panel had been due to feature speakers from Saudi Arabia, Israel, Turkey, Egypt, Russia and the United States.

In the event, it was split into two sessions, the first featuring Turki, Egyptian diplomat Hossam Zaki and Turkish Foreign Minister Ahmet Davutoglu and a second with Ayalon, Russian academic Igor Yurgens and US Senator Joseph Lieberman.

Ayalon began his talk saying it appeared 'a representative of a country with a lot of oil' had pressed the organisers to separate the panel because he 'did not want to sit with us'.

This showed a lack of mutual respect and tolerance, a failing at the heart of the region's problems, he said.

In the subsequent question and answer session, Turki stood up in the audience and said it was not he who had objected and the splitting of the panel was probably due to Ayalon's 'boorish behaviour' with Turkey's envoy to Israel.

This was a reference to a public dressing down Ayalon gave Ambassador Oguz Celikkol in January. Ayalon later conceded his behaviour toward the envoy had been inappropriate. Israel has apologised for the incident.

Ayalon responded to Turki saying Turki had called into question his integrity. He added: 'If indeed it was not him who objected to my being here with him, I would welcome him to shake my outstetched hand.'    

Turki approached the podium, Ayalon descended from it and the men grasped hands.

Davutoglu could not immediately be reached for comment.

Turkey, as a Muslim country, is an important ally of Israel and in the past has helped forge contacts between the Jewish state and the Arab world. But relations have deteriorated following criticism by Prime Minister Tayyip Erdogan of Israel's offensive in the Gaza Strip last year.-Reuters