Egypt's foreign minister said on Friday that resolving the Palestinian question was key to making progress in a US-backed transport project to connect India to Europe via the Middle East by sea and rail.

The project known as the India-Middle East Economic Corridor (IMEC) was announced on the sidelines of a summit of the leaders of Group of 20 major economies in September 2023 and was seen as a US alternative to China's Belt and Road push on global infrastructure.

War broke out a month after the announcement, following the Palestinian Islamist group Hamas' October 7, 2023 attack on Israel.

"We have to bear in mind that connectivity is very important as part of a final settlement of the Palestinian cause," Egypt's Foreign Minister Badr Abdelatty told reporters during a visit to New Delhi.

He said he discussed the IMEC during talks with his Indian counterpart and added that Egypt was open to being a part of the project.

The corridor aims to extend from India across the Arabian Sea to the United Arab Emirates and through Saudi Arabia before connecting through Jordan and Israel to Europe. India and the UAE signed a framework agreement for the project last year.

"The IMEC is an important project but we have to understand that what happened over the last two years is that if you have escalation, that could hinder the cooperation, the connectivity," Abdelatty told reporters.

He also said that Egypt has had a loss of more than $9-billion since the Iran-aligned armed group Houthi started its attacks on ships in the Red Sea, which the group says it has carried out in solidarity with the Palestinians.

"We are paying a heavy price," he said. "We used to have, every day, at least 75 ships crossing the Suez Canal both ways. Now, 25 maximum 50, so it dropped by at least 60%."

Abdelatty arrived in India on Thursday for a two-day visit for bilateral talks, during which he also met Prime Minister Narendra Modi. He said he will meet executives of Indian firms as his country pushes for more Indian investments.

"We have a special industrial zone for China in this region, (and) for Russia. And we are encouraging to have an Indian industrial zone alongside the Suez Canal Economic Zone," he said.