The surprise agreement, initially announced by the US president, Donald Trump, makes the UAE the first Gulf country and only the third Arab nation in the world to have active diplomatic ties with Israel, joining Egypt and Jordan.
United Arab Emirates has normalised relations with Israel in a historic US-brokered deal that “suspends” Israeli annexation of occupied land sought by the Palestinians for their future state.
But it was met with fury by Palestinian leaders: Hamas, the militant group that controls Gaza, called it a “stab in the back”. Palestinian president Mahmoud Abbas said the deal amounts to a “betrayal” and Palestinian official news agency Wafa reported the Palestinian envoy to the Emirates had been recalled.
Mr Trump heralded the “historic breakthrough”, saying the move will advance peace in the Middle East.
In a statement posted on Twitter, he added that the UAE will “immediately expand and accelerate cooperation” with Israel.
“Now that the ice has been broken, I expect more Arab and Muslim countries will follow the United Arab Emirates,” he said.
The Emirati leader Sheikh Mohammed bin Zayed also confirmed the news.
“During a call with President Trump and Prime Minister Netanyahu, an agreement was reached to stop further Israeli annexation of Palestinian territories,” he wrote on Twitter.
“The UAE and Israel also agreed to cooperation and setting a roadmap towards establishing a bilateral relationship,” he wrote.
A joint statement from the US, the UAE and Israel said delegations will meet in the coming weeks to sign deals on direct flights, security, telecommunications, energy, tourism and healthcare.
They are expected soon to exchange ambassadors and embassies and a signing ceremony is due to be held at the White House.
The two countries will also partner on fighting the coronavirus pandemic.
The recognition of Israel by a Gulf state awards Trump a rare and potentially powerful diplomatic triumph ahead of the November election.
It comes after his efforts to broker a peace deal between the Israelis and the Palestinians had shuddered to a halt, with the Palestinian leadership effectively cutting ties with Washington.
Benjamin Netanyahu welcomed the agreement, writing on Twitter that it was a “historic day”. He later said that West Bank annexation plans are for now on hold, but may still go ahead at some point with US coordination.
In a televised address, he said the “full and official peace” with the UAE would lead to cooperation in many spheres and a “wonderful future” for citizens of both countries.
The deal may bolster support for the Israeli leader, who has long boasted of the increasingly close ties his government has enjoyed behind the scenes with Gulf nations.
He will, however, have to answer to his hard-right supporters who have piled pressure on the Israeli premier to annex swathes of occupied Palestinian land despite the fact it is illegal under international law to do so.
Ahead of recent Israeli elections, Mr Netanyahu had promised to imminently push ahead with annexation and welcomed a Trump deal that would allow him to declare sovereignty over a third of the occupied West Bank – territory that, alongside east Jerusalem and Gaza, the Palestinians hoped would make up their future state.
Furious, the Palestinian leadership severed ties with Mr Trump and at one point halted security cooperation with Israel.
On Thursday, leaders from both rival Palestinian factions panned the new deal brokered by Mr Trump. PA Spokesman Abu Rudeineh, reading from a statement, said it was a “betrayal of Jerusalem, Al-Aqsa (mosque, Islam’s third-holiest shrine) and the Palestinian cause”.
Senior Palestinian official Hanan Ashrawi said the Palestinian leadership had not been informed and were “blindsided” by the news.
“Israel got rewarded for not declaring openly what it’s been doing to Palestine illegally & persistently since the beginning of the occupation,” she wrote on Twitter.
Ms Ashrawi also said the UAE has come forward with its “secret dealings/normalisation with Israel”.
The militant group Hamas, which controls the Gaza Strip, called the deal by the Emiratis “a stabbing in the back of our people”. Iran’s Tasnim agency, which is affiliated to the country’s elite Revolutionary Guards one of Israel’s arch enemies, called Thursday’s deal “shameful”.
“Opening direct ties … will transform the region by spurring economic growth, enhancing technological innovation and forging closer people-to-people relations,” the joint statement read.
Yousef al-Otaiba, the Emirati ambassador to Washington, said it was a “significant advance for the region” and “bolsters the stability of Jordan”.
“It immediately stops annexation and the potential of violent escalation. It maintains the viability of a two-state solution as endorsed by the Arab League and international community,” he said.
The announcement was welcomed by several world figures.
The Egyptian president, Abdel Fattah el-Sisi, said he followed “with interest” the agreement, adding: “I value the efforts of those in charge of the deal to achieve prosperity and stability for our region.”
The United Nations secretary-general, Antonio Guterres, said he welcomed “any initiative that can promote peace and security in the Middle East region”, according to a spokesperson.
The US secretary of state, Mike Pompeo, also praised the deal, calling it a “remarkable achievement”.
“It also illustrates their commitment to confronting common threats, as small – but strong – nations,” he added.
Only Egypt and Jordan have active diplomatic ties with Israel.
Egypt made a peace deal with Israel in 1979, followed by Jordan in 1994.
Mauritania recognised Israel in 1999 but later ended relations in 2009 over Israel’s war in Gaza.
Israel has occupied the West Bank and east Jerusalem since the 1967 Middle East war – territories that the Palestinians hope to be part of their future state.
However, Israelis see these lands as theirs, and so has built hundreds of settlements and outposts over the past few decades.