Jordan says it plans to end a lease of two areas of land to Israel that was agreed in annexes to the 1994 peace treaty between the two countries.
The areas are Naharayim in the north and Tzofar in the south, known as Baqura and Ghamr in Arabic.
The lease governing them was for 25 years and had been due for renewal.
Israeli Prime Minister Benjamin Netanyahu said that Israel would negotiate over "extending the current arrangement".
Earlier King Abdullah of Jordan issued a statement saying it wanted to end the lease, which has seen the two areas, covering a total of about 405 hectares (1,000 acres), cultivated by Israeli farmers.
The areas had always been a "top priority" for Jordan and the decision was based on "our keenness to take whatever is necessary for Jordan and Jordanians", the statement said.
Under the terms of the annex to the peace deal, the lease would be extended automatically unless one party gave notice a year before the lease ended, leading to talks on the matter.
Reacting to the Jordanian announcement, Mr Netanyahu said that the whole peace deal between Israel and Jordan was "important and valuable to both countries".
What is Jordan like?
Israel's Jerusalem Post newspaper reported that Israel could use the deal that allows planes travelling between Europe and Jordan to fly over Israel as leverage in persuading Jordan to renew the lease.
Meanwhile the Yediot Aharanot newspaper quoted Eyal Bloom, a local official in southern Israel, as saying that the Tzofar area was important for Israel's security and 30 Israeli farms would collapse if Jordan reclaimed it.
Why would Jordan want to end the lease?
King Abdullah has been under pressure from Jordanian MPs and the Jordanian public not to renew the lease for the two areas. Eighty-seven Jordanian MPs have signed a petition urging an end to the lease.
Last Friday protesters in the Jordanian capital Amman called for the lease to be ended and campaigns have also taken place on social media.
It follows recent strains in the relationship between Jordan and Israel over issues including the status of Jerusalem and the lack of progress on a peace deal between Israel and the Palestinians.