Middle East peace

United Nations Secretary-General Antonio Guterres said on Thursday he hoped the deal could help realize a two-state solution with the Palestinians for peace in the Middle East. Annexation would "effectively close the door" on negotiations between Israeli and Palestinian leaders and "destroy the prospect" of a viable Palestinian state under a two-state solution, he said.

Israel has had difficult relations and several wars with its Muslim and Arab neighbors since its founding in 1948, with most states ruling out relations until the Israeli-Palestinian dispute is resolved.

Thursday's deal would make the UAE only the third Arab country to establish formal diplomatic ties with Israel, after its peace deals with former enemies Egypt and Jordan.

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 on "the halt of Israel's annexation of Palestinian land", and said he hoped it would bring "peace".

The deal marks a major foreign policy achievement for Trump as he heads into a difficult campaign for reelection in November.

His presumptive Democratic challenger for the presidency, Joe Biden, welcomed the agreement and called the UAE's move a "badly needed act of statesmanship".

Hours after the deal was announced, the Emirati flag was projected onto Tel Aviv's town hall.

Agencies, Xinhua and Hong Xiao at the United Nations contributed to this story.