tel aviv | Declaring Israel a “technology powerhouse,” Bill Gates gave a rousing morale boost to the country’s high-tech sector on his first trip to the Jewish state last week.

The Microsoft chairman and world’s richest man put his money where his mouth is in a country he predicted will play a major role in the international market, offering the Israeli government $1.4 million for local start-up companies and promising to help connect thousands of economically disadvantaged Israeli children to the Internet.

“It’s no exaggeration to say that the kind of innovation going on in Israel is critical to the future of the technology business. So many great companies have been started here,” Gates said at a news conference.

He heaped more praise in an interview with Ma’ariv newspaper.

“There is a greater concentration of talented hi-tech manpower here in comparison to other countries, almost to the extent of Silicon Valley,” Gates said.

On his visit, Gates specifically touted Israel’s achievements in information security. He said he also was impressed that so much of the country’s population is computer literate.

Gates said he had come to learn about the Israeli market, where Microsoft has some $120 million in annual sales, reported the Globes newspaper.

The agreement Gates signed with the government promises cooperation between Microsoft and the chief scientist at Israel’s Science and Technology Ministry. The agreement stipulates that money provided by Microsoft will be allocated to start-ups; the companies will also receive help from Microsoft in strategizing new ideas and launching them in the global market.

“We have a great relationship with the government, and look forward to more of that,” Gates said. “I wish I had come sooner. I’m glad I’m here now.”

Gates also met with Prime Minister Ariel Sharon and a group of Israeli students who excel in computer-related topics.

He arrived in Israel by private jet Tuesday, Oct. 25 and spent the night in the presidential suite of the David Intercontinental hotel in Tel Aviv. The hotel arranged to have a cake waiting for Gates, who arrived just before his 50th birthday.

Gates also met with executives from several leading Israeli high-tech companies and spoke to employees of Microsoft’s Haifa research and development operations. The branch was founded in 1989 and employs 200 people.