The rapprochement was struck in Gibraltar amidst a furore surrounding Mr Gil, who is accused by Madrid's chief prosecutor of conniving with a Marbella judge to launder money for the Sicilian Mafia. Mr Caruana brushed aside doubts about Mr Gil's honesty, saying that was an internal Spanish matter and that nothing was proven.
The two men will develop economic, cultural and sporting links between Gibraltar and neighbouring regions of Spain controlled by Mr Gil's Independent Liberal Group (GIL). Mr Gil, a populist rabble-rouser on bail for fraud, and Mr Caruana, the dapper lawyer, make an incongruous couple. But their opportunist alliance could mark the start of a beautiful friendship. They are astute and pragmatic politicians with a talent for an electoral flourish.
They planned to meet over lunch on Thursday in a harbourside restaurant on the Rock, but at the last minute Mr Gil backed out, leaving fellow GIL members, his son Jesus Gil Marin, who is mayor of Estepona, and Juan Carlos Juarez, the mayor of La Linea which borders Gibraltar, as Mr Caruana's only guests.
In local elections on 13 June, Mr Juarez swept into La Linea from nowhere to win a landslide victory. In GIL's swanky offices in La Linea yesterday locals queued to sign up. "None of the other parties ever did anything for us, let's hope GIL [or Gil] can turn La Linea into another Marbella," one enthusiast said.
But Mr Gil has problems. He is on pounds 420,000 bail, charged with funnelling some 450m pesetas (pounds 2m) of Marbella's public funds to Atletico Madrid football club, which he owns. On Wednesday night he was warned that if he left Spain he could be arrested on his return, and forfeit his bail.
So on Thursday lunchtime, he ventured no further than the border. There he told assembled press and a gaggle of fans how sorry he was to miss Mr Caruana, "because he's a good man you can talk to and negotiate with".
But had he not realised that he would face penalties for leaving the country while on bail? Mr Gil turned on a sunny smile and grasped my hand warmly. "Perhaps I was naive, but it honestly didn't occur to me because I'm totally innocent. It's a shame because they're over there waiting for me." He added: "I want to make La Linea the envy of the costa."
Sceptics suspect a publicity stunt, and Mr Gil lost no time in denouncing the state prosecutors as "base-born assassins" for accusing him of Mafia links. However, Mr Caruana is keen to have an interlocutor in Spain and has long said he could do business with Mr Gil. Gibraltar's Chief Minister is fed up with being cold-shouldered by Spain's Foreign Minister, Abel Matutes, who talks only to London.
Mr Caruana wants to boost Gibraltarian business in Spain, and Mr Gil's ideology-free policy of promoting investment, especially in real estate, offers tempting opportunities. Residents of La Linea like the idea, too, scenting escape from decades of depression and unemployment that runs at 35 per cent, the highest in Spain.
Gibraltar is the region's main employer, and some 3,000 Spaniards cross every day to work in hotels and bars on the Rock. Otherwise, La Linea's principle activity is drug trafficking, mainly hashish from nearby Morocco, and increasingly heroin and cocaine.
Mr Gil promised yesterday to clean up the drugs, sweep criminals off the streets and bring prosperity to La Linea. This formula bounced him to power in Marbella eight years ago, and brought subsequent gains along the coast and in the Spanish enclaves of Ceuta and Melilla in Morocco just across the Gibraltar Strait.
La Linea could do with a face-lift. While the rest of the coast is cluttered with marble villas, golf links, timeshare complexes and casinos, La Linea looks more like a Paraguayan frontier town, scruffy and neglected, although with a gorgeous long beach, ripe for development.
The new mayor, Mr Juarez, has taken personal control of urbanisation and relations with Gibraltar as priorities for his new mandate, and Mr Gil has openly declared Gibraltarians welcome in Marbella. Such gestures of friendship from Spain - which avoid the thorny question of sovereignty - are much appreciated on the Rock.
In his dark suit, Mr Caruana stayed cool and elegant by Gibraltar's yacht marina that looked positively Marbella-esque with its fleets of gleaming pleasure craft. He said Mr Gil's party had achieved many improvements in the areas it ruled. He added that he hoped to meet Mr Gil very soon, "whenever he wants" - but that next time the venue would be Marbella.Reuse content