Israel Prime Minister Netanyahu, Trump and UAE Crown Prince Mohammed bin Zayed. Photo: Artur Widak/NurPhoto; Samuel Corum; Odd Andersen/AFP via Getty Images

President Trump announced a "historic" deal Thursday which will see Israel and the UAE open full diplomatic relations and Israel suspend its annexation plans in the West Bank.

Why it matters: This is a major breakthrough for Israel, which lacks diplomatic recognition in many Middle Eastern countries but has been steadily improving relations in the Gulf, largely due to mutual antipathy toward Iran.

  • Egypt and Jordan are the only two Arab countries that have active diplomatic ties with Israel, and the UAE would be the first of the Gulf Arab states to agree to normalize relations.
  • The statement notes that "additional breakthroughs with other countries are possible."

The big picture: Israel and the UAE had been covert allies for 25 years, particularly in their efforts to counter Iran.

  • For the Trump administration, this deal takes Netanyahu’s deeply controversial annexation plans off the table, and achieves a breakthrough between Israel and a major Arab power.
  • Trump is also claiming a major foreign policy achievement ahead of November's election.
  • For Israel and the UAE, the deal in some ways formalizes cooperation that was already taking place, but also presents economic opportunities.

What they're saying: The UAE's de facto ruler, Crown Prince Mohammed Bin Zayed (MBZ), tweeted: “During a call with President Trump and Prime Minister Netanyahu, an agreement was reached to stop further Israeli annexation of Palestinian territories. The UAE and Israel also agreed to cooperation and setting a roadmap towards establishing a bilateral relationship."

  • Between the lines: MBZ is emphasizing the annexation aspect, while sounding far less definitive than Trump about the diplomatic breakthrough. That's a sign there could still be hurdles ahead.

What’s next: According to the joint statement, delegations from Israel and the UAE will meet in the coming weeks to sign bilateral agreements regarding investment, tourism, direct flights, security, telecommunications, technology, energy, healthcare, culture, the environment, the establishment of reciprocal embassies, and more.

Excerpts from the statement issued by Israel, the UAE and the U.S.

  • "This historic diplomatic breakthrough will advance peace in the Middle East region and is a testament to the bold diplomacy and vision of the three leaders and the courage of the United Arab Emirates and Israel to chart a new path that will unlock the great potential in the region. All three countries face many common challenges and will mutually benefit from today’s historic achievement."
  • "As a result of this diplomatic breakthrough and 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 Vision for Peace and focus its efforts now on expanding ties with other countries in the Arab and Muslim World." 
  • "This normalization of relations and peaceful diplomacy will bring together two of America’s most reliable and capable regional partners. Israel and the United Arab Emirates will join with the United States to launch a Strategic Agenda for the Middle East to expand diplomatic, trade, and security cooperation."

This is a developing story and will be updated.

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