Donald Trump, the US president, said on Thursday that the United Arab Emirates and Israel have agreed to establish full diplomatic ties as part of a deal to halt the annexation of occupied land sought by the Palestinians for their future state.
The announcement makes the UAE the first Gulf Arab state to do so and only the third Arab nation to have active diplomatic ties to Israel.
Trump tweeted a statement from the countries, acknowledging the deal. He then told reporters in the Oval Office that it was "a truly historic moment."
"Now that the ice has been broken I expect more Arab and Muslim countries will follow the United Arab Emirates," he said.
The recognition grants a rare diplomatic win to Trump ahead of the November election as his efforts to see an end to the war in Afghanistan have yet to come to fruition while efforts to bring peace between Israel and the Palestinians have made no headway.
For Israel, the announcement comes after years of boasting by Israeli Prime Minister Benjamin Netanyahu that his government enjoys closer ties to Arab nations than publicly acknowledged.
Mr Netanyahu has sought to build settlements on lands sought by the Palestinians and embraced a Trump proposal that would allow him to annex large parts of the occupied West Bank while granting Palestinians limited autonomy in other areas.