Israel's hi-tech industry has received another boost, after technology giant Microsoft announced plans to build a research centre in Haifa.

The Technion, Israel's premier technology institution, will be the site of the nearly £1 million facility. The institution is the alma mater of nearly three - quarters of managers in Israel's electronic industries.

Over the next five years Microsoft plans to create a centre for research into e-commerce, artificial intelligence and game theory.

Yoram Yaacovi, the general manager of the Microsoft Israel research and development centre, said the venture reflected the company's commitment to exciting academic partnerships.

"Microsoft understands that academia is at the heart of technological innovation," he said. "It seeks to catalyse innovation in research and curricula in leading academic institutions worldwide."

The news follows a week in which the pioneering work of Technion scientist Dr Daniel Schechtman was honoured with a Nobel Prize for Chemistry .