A banner of an Israeli flag with a swastika and the wording "Shimon Hitler" was waved in the face of President Shimon Peres Thursday evening as he was arriving at a conference in Sao Paolo. The president was accompanied by Israeli industrialists and was entering a parley focusing on Israeli-Brazilian economic cooperation. The demonstrators, around 40 pro-Palestinian locals, also chanted anti-Israel slogans and waved Lebanese and Palestinian flags, according to sources in the president's entourage. The protest contrasted the warm welcome Peres received in Brazil, after the House of Representatives there ratified the Mercadu Comun del Sur (Mercosur) agreement, which outlines a framework for free trade between Israel and four South American countries. The agreement must first be approved by the Brazilian Senate in order for it to come into force. A statement released by Peres's office said that Brazil's decision was "dramatic and momentous with regard to its economic potential." The South American continent's "Common Market of the South," founded in 1991, is a large-scale free trade bloc of which Brazil, Argentina, Paraguay and Uruguay are full members. Also on Thursday, Israel signed a $350-million deal to supply dozens of unmanned surveillance aircraft to Brazil's national police, according to a defense official. The Heron drones, made by Israel Aerospace Industries Ltd., are to be used to monitor Brazil's borders and help prevent the smuggling of arms, drugs and unspecified natural resources, the official said. They will also be used to augment security during the 2014 World Cup and the 2016 Olympics in Brazil. Israel Aerospace Industries also supplies Heron aircraft to Germany for use in Afghanistan. The defense official spoke on condition of anonymity because he was not authorized to discuss the matter on the record. The deal was signed this week during Peres's visit to Brazil, the official said. The company will deliver 14 systems, each including multiple drones and auxiliary equipment, he said. Deliveries are to begin within several months, he added, without specifying exactly how many drones were involved. Brazilian police are currently at Israel Aerospace Industries being trained to use the system, he said. The company has expanded its operations with Brazil over the past year, setting up a joint venture with US-based Synergy Group to go after Brazilian contracts. In related news, Brazilian Foreign Minister Celso Amorim announced on Army Radio on Thursday that his country would be willing to mediate future peace talks between Israel and Syria.