Israeli cabinet minister Yuval Steinitz expressed hope on Friday that Saudi Arabia would allow Air India to fly to and from Tel Aviv over the kingdom, which would be the first time Riyadh would allow commercial flights bound for Israel to use the country's airspace, Reuters reported.
"There is apparently progress on the matter," Steinitz, the energy minister, told Radio 102 FM.
Saudi Arabia and Israel do not have any official diplomatic relations, and the current airspace ban has been in effect for 70 years. If true, the news could be the first public sign of warming relations between the two countries.
Saudi Arabia and Israel are both opponents of Iranian influence in the region.
Air India announced the planned thrice-weekly flights on Wednesday, but Saudi Arabia's General Authority of Civil Aviation denied granting any such approval.
"I hoped that this matter matter will be worked out," Israel's cabinet minister Steinitiz said, when asked about the Saudi denial.Israel and India discussed the possibility of direct flights during Indian leader Narendra Modi's landmark visit to Israel last month.
Israel's Airports Authority said on Wednesday that the planned flights would begin in March. Air India is reportedly awaiting approval from India's aviation regulator.
Israel's national carrier El Al flies four weekly flights to Mumbai, circumventing Saudi airspace by flying south towards Ethiopia - the detour adds more than two hours to the journey.
The move would be a blow to El Al, which is not expected to receive approval for flying over Saudi airspace, according to Haaretz.
Each year, thousands of Israelis visit India. The country is a popular destination for young travellers fresh off their compulsory military service.