DUBAI - Israel and the UAE agreed Thursday to normalize relations in a landmark US-brokered deal, only the third such accord the Jewish state has struck with an Arab nation.
The agreement, first announced by US President Donald Trump on Twitter, will see Israel halt its plan to annex large parts of the occupied West Bank, according to the UAE.
"HUGE breakthrough" Trump tweeted Thursday, calling it a "Historic Peace Agreement between our two GREAT friends".
Establishing diplomatic ties between Israel and Washington's Middle East allies, including the wealthy conservative Gulf monarchies, is a key goal of Trump's regional strategy to contain Iran which is also an arch-foe of Israel.
The deal would make the United Arab Emirates only the third Arab country Israel has diplomatic relations with after its peace deals with Egypt and Jordan.
The announcement marks a major foreign policy achievement for Trump as he heads into a difficult campaign for re-election in November.
Israeli Prime Minister Benjamin Netanyahu said it was a "historic day".
Israel agreed "to stop further... annexation of Palestinian territories" under the plan to normalize relations, the Crown Prince of Abu Dhabi tweeted following Trump's bombshell.
The controversial Trump plan, unveiled in January and strongly opposed by the Palestinians, had offered a path for Israel to annex territory and Jewish West Bank settlements, communities considered illegal under international law.
"During a call with President Trump and Prime Minister Netanyahu, an agreement was reached to stop further Israeli annexation of Palestinian territories," Sheikh Mohammed bin Zayed Al-Nahyan wrote on his verified Twitter account.
However Palestinian Islamist group Hamas, which runs the coastal Gaza Strip, quickly said the agreement "does not serve the Palestinian cause".
President Abdel Fattah al-Sisi of Egypt, which signed a treaty with Israel in 1979 to opposition from across the Arab world, praised the deal "concerning the halt of Israel's annexation of Palestinian land," and said he hoped it would bring "peace" to the Middle East.
Trump suggested to reporters that more diplomatic breakthroughs between Israel and Arab countries in the region were expected but gave no further details.
"Things are happening that I can't talk about," he said.
US Secretary of State Mike Pompeo described it as "a historic day and a significant step forward for peace in the Middle East".
"The United States hopes that this brave step will be the first in a series of agreements that ends 72 years of hostilities in the region," Pompeo said.
Israel has had difficult sometimes violent relations with the Muslim and Arab world since its founding in 1948.
The agreement would be signed at the White House at a future date, Pompeo said.
Richard Hass, president of the Council on Foreign Relations, told AFP the deal was "a milestone in Arab acceptance of Israel in the region".
It was also "a brake on annexation, which would jeopardize Israel's peace with Jordan and Israel's own future as a Jewish, democratic state", he said.
In a joint statement, Trump, Netanyahu and Prince Mohammed said they had spoken on Thursday "and agreed to the full normalization of relations between Israel and the United Arab Emirates".
Israeli and UAE delegations will meet in the coming weeks to sign bilateral agreements regarding investment, tourism, direct flights, security and the establishment of reciprocal embassies, they said.
"At the request of President Trump with the support of the United Arab Emirates, Israel will suspend declaring sovereignty over areas outlined in the President's Vision for Peace and focus its efforts now on expanding ties with other countries in the Arab and Muslim world," the statement said.
"The United States, Israel and the United Arab Emirates are confident that additional diplomatic breakthroughs with other nations are possible, and will work together to achieve this goal," it added.
Aaron David Miller, a veteran US negotiator on the Middle East peace process and analyst at the Carnegie Endowment for International Peace, called it a "win for all".
"(The) UAE says it's prevented annexation; US prevents annexation too and gets big breakthrough and Netanyahu gets enormous win and off-hook from the annexation trap," he tweeted.