A joint statement by the US, UAE and Israel said the "breakthrough" will promote "peace in the Middle East region and is a testament to the bold diplomacy and vision of the three leaders," referring to Trump, Prince Mohammed bin Zayed al-Nahyan and Netanyahu.
The UAE's official news agency also touted the agreement as a step towards bilateral relations.
The UAE becomes the third Arab nation and the first Gulf Arab state to have full diplomatic ties with Israel. The other Arab nations with diplomatic ties with Israel are Egypt and Jordan.
Palestinian groups denounced the new agreement, saying it does nothing to serve the Palestinian cause and ignores the rights of the Palestinian people.
The UAE peace deal with Israel is a "treacherous stab in the back of the Palestinian people," Hamas said in a statement.
