UAE announces $10 billion Israel investment fund
The decision, the UAE official news agency WAM said, was taken following a "constructive" phone call between Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed and Israeli Prime Minister Benjamin Netanyahu.
Through the $10 billion fund the UAE "will invest in and alongside Israel, across sectors including energy manufacturing, water, space, healthcare and agri-tech," it said.
The deal made the UAE only the third Arab state to establish relations with Israel, following Egypt in 1979 and Jordan in 1994.
Bahrain, Morocco and Sudan subsequently reached similar US-brokered agreements with Israel, in what has become known as the "Abraham Accords."
"The fund builds on the historic Abraham Accord and aims to bolster economic ties between two of the region's thriving economies, unlocking investments and partnership opportunities to drive socio-economic progress," WAM said.
It said fund allocations "will derive from government and private sector institutions".
The announcement came as Netanyahu cancelled a historic visit to the UAE on Thursday, citing a disagreement with Jordan over crossing its airspace.
Netanyahu said the trip "was not possible due to a misunderstanding" with Jordan, with which it is bound by a peace treaty since 1994.
But said he spoke to Sheikh Mohammed, the UAE's de facto leader, and that the pair agreed to meet "very soon”.
Meanwhile, tensions have run high between Palestinian factions and the UAE, intensified by the Israel and the Gulf state's signing of the so-called Abraham Accords last year in Washington.
All Palestinian parties have been vocal in their opposition to the normalisation deals, which they say undermines efforts for a two-state solution.
The normalisation agreements between Israel and Arab states have been widely condemned in Arabic-speaking and Muslim-majority countries, where relations with Israel have long been eschewed out of solidarity with the Palestinians.
Agencies contributed to this report.