The TLDR: In an agreement brokered by President Trump, the two countries have opened the door normalising relations. This makes UAE the first Gulf Arab country to establish diplomatic ties with Israel. It is only the third such Israel-Arab deal since its independence in 1948—the other two being Egypt (1979) and Jordan (1994). But there are some indications that the surprise announcement may be more a PR exercise than a genuine diplomatic breakthrough. Others insist that it offers reason for “cautious optimism.”

Tell me about this deal

The agreement was first announced by Trump who called it "a truly historic moment"—with Israel and UAE following suit. It establishes full diplomatic relations; the exchange of embassies; and normal trade ties between the two countries. In the coming weeks, they are expected to sign a flurry of bilateral agreements around investment, technology, security etc. 

But the announcement papered over a key and very thorny issue: The West Bank.

What about the West Bank?

First, some background: Both Israel and Palestine assert their rights over this strip of land that borders Jordan—and it has been the sticking point in any Middle East peace negotiation.

• The West Bank has been occupied by Israel since the 1967 war. 
• Right now, between 2.1 million and 3 million Palestinian Arabs live there under both limited self-rule and Israeli military rule. 
• There are also 430,000 Israeli Jews who live in 132 settlements—which are considered illegal by the Palestinians. 
• In June, Prime Minister Netanyahu announced a plan to outright annex the parts occupied by Jerusalem (around 30%)—and declare them a part of Israel. 
• This will open the door to the open and easy construction of Jewish settlements—which currently require the approval of Israeli PM and Defence Minister.
• Point to note: The Trump administration greenlit the plan—but it caused a huge backlash from European and the Arab nations. 
• The UN warned that the move "would dramatically shift local dynamics and most likely trigger conflict and instability in the occupied West Bank and Gaza Strip."

Enter, the UAE deal: which is highly unclear (perhaps deliberately so) on the matter of annexation. 

Netanyahu said the plan has been “delayed” but not abandoned:

"There is no change in my plan to apply our sovereignty to Judea and Samaria [West Bank] in full coordination with the US. I'm committed to it. That hasn't changed. I remind you that I was the one who put the issue of sovereignty over Judea and Samaria on the table. This issue remains on the table."

But Dubai’s Crown Prince Mohammed tweeted: “During a call with President Trump and Prime Minister Netanyahu, an agreement was reached to stop further Israeli annexation of Palestinian territories.” Also this: 

"The UAE Minister of State for Foreign Affairs, Anwar Gargash, said the UAE's recognition of Israel was "a very bold step" to stop the "ticking time bomb" of Israel's annexation of the West Bank. He said the UAE saw this as "a stoppage of the annexation, not a suspension".

In any case the Palestinians are far from thrilled, calling it “a black day in the history of Palestine” and “a total departure from the Arab consensus.” Translation: the UAE sold us out.

But why would the UAE do that?

Sunni Arab nations are increasingly more worried about a Shia-ruled Iran than Israel. As the New York Times notes, Israel’s intelligence agency Mossad has had clandestine relations with the Emirates, Saudi Arabia, Qatar, Jordan and Egypt. The pandemic gave an additional boost to those ties:

“[Mossad director Yossi] Cohen has made several secret trips in the past year to the Emirates seeking to enhance cooperation, and the outbreak of the coronavirus created an additional opening. The Mossad took responsibility for procurement of medical equipment that Israel lacked, and shipments arrived on secret flights from the Emirates.”

The agreement merely puts a ring on a long-standing clandestine affair. Left off the guest list: Palestine which remains under the boot of Israeli occupation.

The bottomline: is best summed up by Ha’aretz, which notes with appropriate cynicism:

“Now Netanyahu can present a “historic agreement,” while annexation, as a practical matter, has been taken off the table—despite the prime minister's claims that it has only been ‘temporarily suspended.’ The UAE is considered the party that put a halt to the annexation plan with the applause of the international community. And the Americans can boast that this time their ‘peace plan’ really did lead to a kind of peace.”

And the US outlets like Vox are certainly framing it as Trump’s “biggest foreign policy victories”—timed just months before his reelection bid.

Reading list

BBC News and New York Times offer a comprehensive overview of the deal. BBC also offers an excellent explainer on the West Bank. Ha’aretz has the best analysis of the agreement. For a less cynical take, read Vox’s breakdown. Read the joint statement released by the US, Israel and UAE on CNN. Al Jazeera rounds up the international reaction. Politico explains why this is a big win for Trump.