By Ben Harding

ZARAGOZA, Spain, June 27 (Reuters) - After 20 years of negotiations, Spain and France on Friday agreed to lay a new cross-border power line, but their prime ministers failed to close a deal on a common immigration policy.

The high-tension line will reduce Spain's isolation from European electricity grids by doubling the current capacity - enough to power the summit's host city, Zaragoza.

"This is a historic day. An agreement that means we are going to double the electricity interconnection between our countries," Zapatero said, standing alongside French Prime Minister Francois Fillon following their one-day summit in the northern Spanish city.

However, there was no agreement on a common immigration position which France has said it will push for during its forthcoming six-month presidency of the European Union.

A deal between Spain, perceived as having a more immigrant friendly policy and France, with its tougher line, would represent an important step towards the EU´s 27 states agreeing a common position.

Zapatero said the two countries continued to work towards an immigration pact to defend legal immigration but jointly fight illegal immigration.

"There still some ground to cover and issues to discuss," said Zapatero, adding he expected an agreement soon.

Newspaper El Mundo quoted Spanish officials as saying a key sticking point, the inclusion of an 'integration contract' which immigrants would have to sign -- a proposal opposed by Spain -- had been deleted from the text.

A deal on the electricity connection had been delayed for more than a decade, due in large part to concerns that it might spoil areas of natural beauty in the eastern Pyrenees.

Spain's electricity grid operator, Red Electrica has said the lack of interconnection makes it difficult to manage the country's rapidly expanding wind power sector.

Among other topics discussed, Zapatero said the two countries agreed to coordinate naval forces to patrol the sea near Somalia and protect fishing boats which have fallen victim to pirates in the area recently. (Additional reporting by Martin Roberts)

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