The foreign ministers of Morocco and Israel signed three accords on Wednesday during the first visit by a top official from the Jewish state since ties were normalized last year.
Nasser Bourita and his Israeli counterpart Yair Lapid signed agreements on political consultations, aviation and culture.
Lapid told reporters the accords would "bring our countries innovation and opportunities for the benefit of our children -- and their children -- for years to come".
Israel and Morocco struck a deal last year after then US president Donald Trump recognized Morocco's contested sovereignty in Western Sahara.
"Today, we are restoring peace, restoring friendship," Lapid said, AFP reported.
Morocco was the fourth Arab state to establish ties with Israel last year after the United Arab Emirates, Bahrain and Sudan.
Bourita said that during his talks with Lapid, the situation in Israel and the Palestinian territories was raised.
"King Mohammed VI insists on the need to break the current impasse and resume negotiations, as the only means of reaching a solution based on two states living side by side on the 1967 borders," Bourita said.
The monarch had reassured Palestinian president Mahmoud Abbas after the normalization of ties that Morocco would continue to support the Palestinian cause.
"It is urgent that measures be taken today to restore confidence and maintain calm, to open a political horizon to the Israeli-Palestinian conflict," Bourita said.
Lapid said he preferred to focus on the normalization of ties between Israel and Arab countries.
"Something is happening in the region," he said.
On Thursday, Lapid will officially open Israel's diplomatic representation in the capital Rabat.
US Secretary of State Antony Blinken called Lapid's visit "significant for Israel, Morocco, and the broader region".
"The United States will continue to work with Israel and Morocco to strengthen all aspects of our partnerships and create a more peaceful, secure, and prosperous future for all the people of the Middle East," Blinken said in a statement.
The American embassy in Rabat said that ties between the two countries generated "real benefits" for both sides including direct commercial flights and economic cooperation.
Before the Bourita-Lapid meeting, the Israeli delegation visited the royal mausoleum, where kings Hassan II and Mohammed V are buried.
Lapid is also expected to visit the Beth-El synagogue in Casablanca on his two-day visit, the Israeli foreign ministry said.
"Proud to represent Israel during this historic visit," Lapid wrote on Twitter, just after his flight operated by Israeli national airline El Al landed.
His visit comes a little over two weeks after direct flights were launched between Israel and Morocco.
Morocco and Israel maintained liaison offices in the 1990s, before closing them during the second Palestinian intifada, or uprising, that raged from 2000 to 2005.
Lapid's visit to Rabat follows a June trip to the United Arab Emirates, where he inaugurated the new Israeli embassy in Abu Dhabi.
It comes just days before Israel is due to require all travelers returning from Morocco to quarantine following a review of the risks of Covid-19 infection.
Last December Israel and Morocco signed agreements on water, aviation and finance, when a delegation of Israeli officials arrived on a first direct flight between Rabat and Tel Aviv.
And in July, the two countries signed a cyber defense cooperation accord in Rabat.