The Israeli Antiquities Authority said the ruins are believed to date back to the third or fourth centuries and include references to Jesus and images of fish, an ancient Christian symbol.
"This is a very ancient structure, maybe the oldest in our area," said Yotam Tepper, the head archaeologist on the dig.
The dig took place over the past 18 months at the Megiddo prison in Israel's northern Galilee region, with the most significant discoveries taking place in the past two weeks, Tepper said. Scholars believe Megiddo to be the New Testament's Armageddon, the site of a final war between good and evil.
Tepper said the discovery could reveal more about an important period of Christianity, which was banned until the fourth century.
"Normally, we have from this period in our region historical evidence from literature, not archaeological evidence," he said. "There is no structure you can compare it to. It is a very unique find."
Channel Two television, which first reported the story, broadcast pictures of a detailed and well-preserved mosaic bearing the name of Jesus Christ in ancient Greek and images of fish.
Pietro Sambi, the Vatican's ambassador to Israel, praised the find as a "great discovery."
"Of course, all the Christians are convinced of the history of Jesus Christ," he told Channel Two. "But is it extremely important to have archaeological proof of a church dedicated to him? Certainly."
Joe Zias, an anthropologist and a former curator with the Israeli Antiquities Authorities, said the discovery was significant but unlikely to be the world's oldest church. He said Christianity was outlawed until the time of Emperor Constantine in the fourth century, and there were no churches before then.
"The earliest it could be is fourth century and we have other fourth-century churches. I think what is important here is the size, the inscription and the mosaics," he said. "I think it is an important find ... but I wouldn't say it was the oldest church in the world."
The Antiquities Authority said more than 60 prison inmates participated in the dig in recent months. Channel Two said there is speculation Israel may move the prison and open a tourist attraction in its place.
"If it's between a prison and a church, I would like a church," Zias said. "You can put a prison anywhere."
Israeli Tourism Minister Avraham Hirshzon said the discovery could greatly increase tourism to Israel.
"If we nurture this properly, then certainly there will be a large stream of tourists who could come to Israel," he told Channel Two.
11-06-05 10:26 EST