The commission will be made up of five independent judges, none of whom will be from either Argentina or Iran.

Argentine courts have blamed Iran for the attack, which killed 85 people. Iran has always denied any involvement.

Israel's foreign ministry said it was "surprised" by news of the commission.

Spokesman Yigal Palmor told the AFP news agency that it was waiting "to receive full details" from Argentina.

Amia and another key Argentina Jewish organisation were meanwhile reported to be vehemently opposed to the move.

Iran agreed last July to co-operate with Argentina in the investigation, which it said "was going down the wrong way".

Such negotiations have alarmed Israel's government and Argentina's sizeable Jewish community, who fear Argentina is weakening in its resolve to put suspects on trial.

"We warned the Argentines from the start that the Iranians would try to set a trap for them and that they should beware," Mr Palmor was quoted by AFP as saying on Monday.

The news agency also quoted a joint statement by Amia and the Delegation of Israelite Argentine Associations as saying that the new move would "imply a decline in our sovereignty".

"To ignore everything that Argentine justice has done and to replace it with a commission that, in the best of cases, will issue, without any defined deadline, a 'recommendation' to the parties constitutes, without doubt, a reversal in the common objective of obtaining justice," the statement said.

However, Argentine President Cristina Fernandez de Kirchner called the agreement "historic".

"It guarantees the right to due process of law, a fundamental principle of international criminal law," Ms Fernandez said.

She said Argentine Foreign Minister Hector Timerman and his Iranian counterpart had signed a memorandum of understanding on the sidelines of an African Union summit in Addis Ababa, in Ethiopia.

It still has to be ratified by the parliaments of both countries.

The commission would "analyse all the documentation presented to date by the judicial authorities of Argentina and Iran", Ms Fernandez wrote on her Twitter account.

According to Mr Timerman, the agreement will make it possible for Argentine legal officials to question Iranian suspects in Tehran.

Among the suspects named by Argentine prosecutors when they made their case in 2007 is Iran's current Defence Minister, Gen Ahmed Vahidi.

At the time of the attack, Gen Vahidi was the commander of a special unit of Iran's Revolutionary Guards.

Argentine prosecutors said Iran planned and financed the attack, and that the Lebanese militant group Hezbollah carried it out.

No-one has been convicted of the car bombing which destroyed the seven-storey cultural centre.