Lebanon and Israel, for the first time, sent civilian representatives to a meeting of a previously military-only ceasefire monitoring mechanism.
The mechanism was set up after the latest war between Israel and the Lebanese militant group Hezbollah ended over a year ago.
The talks on Wednesday were held at the headquarters of the UN peacekeeping force, UNIFIL, in Naqoura, near Lebanon's southern border.
The United States, which helped broker last year's ceasefire, wants direct, structured talks between Israel and Lebanon, but leaders in both countries have reservations.
Israel and Lebanon do not have diplomatic relations
Prime Minister Nawaf Salam said Lebanon is far from normalizing ties with Israel and remains committed to the 2002 Arab Peace Plan, which links diplomatic relations with Israel to the creation of a Palestinian state, a condition Israel's government rejects.
"Economic relations would be part of such normalization, so then obviously anyone following the news would know that we are not there at all," Salam said.
Israeli Prime Minister Benjamin Netanyahu's office said the atmosphere of the talks was "positive" and that there was agreement "to develop ideas to promote potential economic cooperation between Israel and Lebanon."
The Israeli leader's office added, however, that it was "essential" for Hezbollah to disarm regardless of any progress in economic cooperation.
The question of Hezbollah and Lebanon and Israel's relationship
The Lebanese government has committed to disarming Hezbollah, starting with the south, where it has long held sway.
Hezbollah, whose military wing is designated as a terrorist organization by several countries, has, however, said the group will not consider full disarmament until Israel withdraws from all Lebanese territory and halts its attacks.
Israel continues to maintain positions in southern Lebanon and has carried out nearly daily airstrikes, which it says are aimed at preventing Hezbollah from rebuilding its capabilities and planning new operations.
People in Lebanon fear Israel may resume a full-scale campaign amid frustration over slow efforts to disarm Hezbollah.
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