The decision comes mostly as a result of Israeli-American disagreements over the protection of pharmaceutical companies' information. The U.S. says Israeli authorities allow Israeli drug companies to examine research information from patent-holding foreign pharmaceutical companies.

Negotiations fail to resolve disagreements

In the past year, Israel and the U.S. have been engaged in negotiations in a bid to resolve the matter, but the Americans were not satisfied with measures taken by Israel.

Countries that have been blacklisted by the U.S. are subject to special American supervision in areas such as film, music, and software.

Other countries placed in the unflattering list include Indonesia, Argentina, Brazil, India, Venezuela, Turkey, Kuwait, Lebanon, Egypt, China, the Philippines, Russia, and Pakistan.