UPDATE 1-Israel sends treaty delegation to Bahrain with Trump aides
* U.S. treasury secretary accompanies Israeli delegation
* Israel and Bahrain last month agreed on formal ties
* U.S. also brokered Israel-United Arab Emirates deal (Updates with departure, adds quotes)
JERUSALEM, Oct 18 (Reuters) - An Israeli delegation accompanied by the U.S. treasury secretary flew to Bahrain on Sunday to formalize nascent relations and broaden Gulf cooperation that Washington has promoted as an anti-Iran bulwark and potential economic bonanza.
Bahrain followed the United Arab Emirates in agreeing last month to normalize ties with Israel, stunning Palestinians who had demanded statehood before any such regional rapprochement.
The breakthrough, overseen by U.S. President Donald Trump, is a foreign policy flourish ahead of his reelection bid next month. For the U.S. allies, it is a chance to close ranks on Iran more overtly.
The Israeli delegation, which boarded an El Al Israel Airlines charter flight to Manama, was accompanied by U.S. Treasury Secretary Steve Mnuchin. His office said the mission seeks "expanded economic cooperation" among Israel, Bahrain and the UAE.
At a ceremony with Mnuchin at Tel Aviv's Ben Gurion airport, U.S. Middle East envoy Avi Berkowitz said that Israel and Bahrain would sign a joint communique "bringing forward tourism and banking and diplomatic relations."
Also speaking at the airport ceremony, the head of the Israeli delegation, National Security Adviser Meir Ben-Shabbat, said talks would also focus on sectors such as finance and aviation.
Israel and Bahrain signed a "Declaration of Peace, Cooperation, and Constructive Diplomatic and Friendly Relations" at a White House ceremony on Sept. 15, a document that fell short of a formal treaty.
An official involved in the visit said the communique would upgrade the relationship between the two countries.
The signing of the declaration with Israel last month drew anger among Bahrainis at home and abroad. Bahrain, where a Sunni Muslim minority rules a Shi'ite majority population, has said the deal protects its interests from Iran.
The route of El Al Flight 973, a nod to Bahrain's telephone code, was to take it over Saudi Arabia, an accommodation by the Gulf powerhouse that has so far resisted U.S. appeals to normalize ties with Israel.
Mnuchin and the other U.S. officials travel on Monday to the UAE, where accord with Israel has uncorked bilateral commerce. On Tuesday the U.S. dignitaries will join the UAE's first delegation to Israel.
Though less oil-rich than the UAE, Bahrain - host to the U.S. Navy's Fifth Fleet - has geo-strategic significance.
A Sept. 13 report by Israel's Intelligence Ministry saw potential for defense cooperation with Bahrain, describing it as threatened by "Shiite political sedition, directed by Iran and its proxies."
Israel could also help Bahrain with renewable energy, food security and banking and finance technologies, it said. (Editing by Rami Ayyub and David Goodman )
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