The United Arab Emirates is to become only the third Arab state – following Egypt and Jordan – to agree to the full normalisation of relations with Israel.

The surprise, but historic, announcement of the move last month will have an important impact on the Jewish state’s efforts to broker stronger ties with the Arab world. The effects will also be felt in its domestic politics and in the conflict between Israel and the Palestinians.

The agreement between Israel and the UAE immediate puts pay to Benjamin Netanyahu’s professed – but already delayed – desire to begin annexing parts of the West Bank. Although the UAE and Israel are believed to have been in talks for over a year, in June the Emirates’ ambassador to the United States, Yousef al-Otaiba, reportedly approached the Trump administration with an offer: the UAE would agree to normalisation with Israel in return for an Israeli announcement that West Bank annexation was off the table.

Praising the UAE’s proposal, Dennis Ross, a former Middle East adviser to the Clinton and Obama administration, suggested: “It looks as if they understood that this move would preserve the option for a two-state solution (even if it doesn’t happen anytime soon) and preempt Iran (and probably also Turkey) from exploiting the anger that annexation would likely produce to serve their aims in the region.”

Although largely carried out behind the scenes, Israel and the UAE have been developing closer business and trading ties over the last decade. The announcement of the agreement said the two countries will meet in the coming weeks to sign bilateral agreements in investment, tourism, direct flights, security, telecommunications, technology, energy, healthcare, culture, the environment, the establishment of reciprocal embassies, and other areas of mutual benefit. The Israeli media is already speculating about what that may mean in concrete terms.

Already, this week, the first official flight flew from Tel Aviv to Abu Dhabi. This historic flight was allowed to cross Saudi Arabian airspace, usually blocked to Israeli air traffic. In a further boost, Saudi Arabia today announced permanent overfly rights for aircraft between Israel and the UAE. This week’s events followed the formal repeal on Saturday of the UAE’s Israel boycott law, which previously outlawed trade and business between the two countries. Mere days later, a co-operation deal, focussed on banking and finance, was agreed by the UAE central bank, the Israeli Finance Ministry and Israeli financial regulators.

Nevertheless, a critical impetus for the détente between Israel and the Gulf states in recent years is their shared fear of Iranian expansionism and the rise of Islamist movements.

Netanyahu’s agreement to the offer – and the ensuring deal with the UAE – has provoked anger on the Israeli right and among the Palestinians. It has, however, been warmly welcomed by the Israeli public (Tel Aviv City Hall was illuminated with the UAE flag on the evening of the announcement, pictured above).

The Palestinian Authority has recalled its ambassador to the UAE and announced that it will boycott the Dubai Expo conference due to take place next October. Mahmoud Habbash, an adviser to President Mahmoud Abbas, berated the Arab League for its “shameful” silence, stating: “Is this the Arab nation?”

Iran’s Foreign Ministry stated: “This is stabbing the Palestinians in the back and will strengthen the regional unity against the Zionist regime” and warned that the UAE will be “responsible for [the] consequences” of what it termed a “dangerous move”. Hamas unsurprisingly echoed this language, accusing the UAE of “a stabbing in the back of our people”.

Another ally of Hamas, Turkey, also strongly condemned the UAE, saying “the region’s peoples will not forget and never forgive this hypocritical behaviour of the UAE, betraying the Palestinian cause for the sake of its narrow interests”.

Next up?

By contrast, Egypt and the United Nations’ secretary-general, Antonio Guterres, both welcomed the announcement. Moreover, a number of other Arab and north African states are now believed likely to follow the UAE in establishing formal ties with Israel. Bahrain expressed its “congratulations” to the UAE in securing Israel’s agreement to halt annexation, while adding that it “commended the sincere diplomatic efforts made by the UAE and stress that this historic step will contribute to the consolidation of stability and peace in the region”. Bahrain’s prime minister, Khalifa bin Salman Al Khalifa, is reported to have talked to the head of Mossad, Yossi Cohen, around the time of the UAE announcement.

There has been speculation that Oman, Sudan and Morocco may also move to establish relations with Israel. The biggest prize for Israel – Saudi Arabia – is thought likely to hold back from agreeing formal ties, with Prince Turki al-Faisal, a senior member of the royal family, suggesting that it would await the establishment of a Palestinian state with its capital in Jerusalem. He explicitly referenced the Saudi-led 2002 Arab Peace Initiative which offered Israel recognition on those terms. But the prince also praised the UAE for securing a halt to annexation. The Saudis and the UAE are close allies and the latter is unlikely to have made its move without the agreement of the latter. Moreover, Saudi Arabia and Israel already discreetly cooperate to counter Iran.

As David Horovitz of the Times of Israel noted, unlike with Egypt, Jordan or, in the future, Saudi Arabia, the UAE’s path to formal ties with Israel is a potentially easier one. “The UAE is our first peace partner with whom we do not have a bloody history,” he wrote. “Our ties are not being established over shared memories of war and loss. The forging of our alliance is less emotionally dramatic, less fraught, less militarily important. In short, more normal. The union might just last. And there may yet be further weddings.”

As well as the current threat posed by Iran – and its desire to halt annexation – the past also appears to have weighed heavily in the UAE’s thinking. In an interview with Israeli TV, the UAE’s minister of state for foreign affairs, Anwar Gargash, argued: “Clearly, 70 years of not communicating with Israel has led us nowhere. I think we need to shift to a new method of doing things. And that method simply is: We can disagree with you in political issues, but we can work with you [on] non-political issues.”

Those comments, suggested Horovitz, were “at once banal and earth-shattering, a statement hitherto almost unthinkable in the context of Israel and the Arab world. It changes nothing about the core issues in the Israeli-Palestinian conflict, but it potentially remakes the regional, and even the global context, in which that conflict is viewed and handled”.

Warm welcome in Israel

Within Israel, the agreement with the UAE was welcomed on the centre and left, while Netanyahu’s decision to drop annexation was sharply criticised by settlers and some sections of the right.

The leader of the centrist Blue and White party, defence minister Benny Gantz said the agreement “demonstrates the alliance between countries in the region who are interested in prosperity and regional stability, and it stresses Israel’s eternal ambition for peace with its neighbours”. Labor leader Amir Peretz labelled it “the path of political negotiations for a comprehensive peace agreement that will lead to a comprehensive peace accord, which will bring about economic and political prosperity — and, of course, preserve Israel as a Jewish and democratic state.”

There were also warm words from opposition leader Yair Lapid, who argued the agreement represents “an important step toward normalisation of relations with the United Arab Emirates. This step is proof that negotiations and agreements, not unilateral steps like annexation, which would harm Israel’s security, are the way forward for our diplomatic relations”.

However, Naftali Bennett, a former Netanyahu defence minister and the leader of the pro-settler Yamina party, said the prime minister had “squandered the chance to extend sovereignty [to] the Jordan Valley, Ma’ale Adumim, Beit El and the rest of the settlements”. Settler leaders, such as the Samaria Regional Council chair Yossi Dagan, also accused Netanyahu of betrayal. “Netanyahu was elected three times last year on a platform of sovereignty [annexation],” he said. “That’s the only thing he had against the left’s case that his [legal] situation rendered him unfit. If Netanyahu sells out Judea and Samaria, he’ll be cutting off the political branch he sits on and his government’s future.” Summarising the fury among the settlers at Netanyahu, the Israeli journalist Nahum Barnea wrote that the prime minister “veritably took the food out of their mouths. Just a few weeks ago, they were quarrelling over the question of how much and where to annex.”

But the anger among some sections of the Israeli right may indicate a misreading of Netanyahu’s intentions. As the Haaretz columnist Anshel Pfeffer argued: “Benjamin Netanyahu never had a real plan for annexing parts of the West Bank. There was no timetable, no map, no draft resolution to be brought to the government or the Knesset. Just a pile of broken election promises and a lot of empty talk … That plan he never planned to carry out has bought him a significant diplomatic coup.”

In terms of domestic Israeli politics, Netanyahu’s decision to ditch annexation in favour of the agreement with the UAE appears a wise call. Underlining the flimsy and weak support for annexation, 77 percent of Israelis indicated in a poll after the announcement that they preferred normalised relations with the UAE to annexation, with only 16.5 favouring the application of “sovereignty” to West Bank settlements and the Jordan Valley.

Nonetheless, Israel is likely to pay a concrete price for the agreement with the UAE. As it did with Egypt and Jordan after they established diplomatic relations with Israel, the United States appears ready to now sell the UAE weaponry – in this case, advanced F-35 aircraft – which it had previously refused to allow the Gulf state to buy. The row over the potential arms sales – which Israel opposes – reportedly led the UAE to cancel a planned trilateral meeting with the US and the Jewish state.

Palestinian anger – and politics 

Aside from their fear of Iran, the agreement underlines what Dr Yoel Guzansky of the Institute for National Security Studies has termed the “growing exasperation” among some of the Gulf states at the what they perceive as the refusal of the Palestinian leadership to show more flexibility in its response to various peace proposals since the Oslo Agreement in 1993. That exasperation was evident in both the weak condemnations issued by Saudi Arabia and the UAE following Trump’s decision to relocate the US embassy to Jerusalem and, by contrast, their positive response to the administration’s peace plan when it was launched in January.

As Guzansky has also noted, the split between Hamas and the PA has also created “differences of opinion” among the Gulf states: the UAE and the Saudis view with suspicion Hamas’ ties to Iran, while Qatar has a much warmer relationship with the Gazan terror group.

The vehemence with which the PA attacked the Emirates’ agreement with Israel  – despite it effectively ending the threat of annexation – reflects Ramallah’s weakening position. It should also, Ross argued, serve as a warning to the Palestinians that “others are not going to wait for them. Focusing only on their grievances, their narrative and their posture of never initiating or offering counterproposals to negotiations will continue to weaken their position.”

But the Palestinian leadership’s anger is also rooted in the internal politics of Fatah and the battle to succeed the 84-year-old Abbas, who is now in the 20th year of his five-year term as president. Mohammad Dahlan, a key adviser of the UAE’s crown prince, Mohammed bin Zayed, is seen by many as likely to have acted as the “secret broker” of the UAE-Israel deal. But Dahlan is also a former PA Gaza security chief and adviser to Abbas, with whom the president has been engaged in a bitter feud since 2011 when he was forced out of the West Bank and went into exile in the UAE. Abbas’ fear of Dahlan’s future intentions – and the suspicion that he still hopes to succeed him – is shared by others, such as Jibril Rajoub, who also have their eyes on the Palestinian presidency.

Ultimately, however, for both Israel and the Palestinians, the UAE deal is good news: it preserves both the viability of a two-state solution and Israel’s character as a Jewish and democratic state, while increasing the prospects of regional stability and countering the pernicious influence of Iran.