First Madrid-Gibraltar flights to start on December 16

MADRID, Nov 17 (Reuters) The first flights between Madrid and Gibraltar will start on December 16, Spain said today, after a landmark deal with Britain to cooperate to solve problems in the region despite the dispute over ownership of the Rock.

The daily service by Spanish flag carrier Iberia comes thanks to a September agreement between Spain, Britain and Gibraltar in September over the British-ruled territory.

Opening up Gibraltar's airport -- which Spain says is on land not ceded to Britain under the Treaty of Utrecht in 1713 -- will also benefit the Spanish side of the border, which is underdeveloped.

Some hoteliers have already moved in to the area, betting that the new deal will bring thousands of visitors.

Under the three-way agreement, travellers arriving in Gibraltar from Madrid will be able to cross straight into Spain without passing through British customs.

In a statement, the Spanish Foreign Ministry said today work on a new airport terminal and improvements to the airstrip, which runs across the only road leading to Gibraltar, had also started.

REUTERS SY RAI2352