"HUGE breakthrough today! Historic Peace Agreement between our two GREAT friends, Israel and the United Arab Emirates!" US President Donald Trump tweeted.
He later told reporters: "Everybody said this would be impossible... After 49 years Israel and the United Arab Emirates will fully normalise their diplomatic relations."
US Secretary of State Mike Pompeo said: "The United States hopes that this brave step will be the first in a series of agreements that ends 72 years of hostilities in the region."
Democratic presidential hopeful Joe Biden said: "The UAE's offer to publicly recognise the state of Israel is a welcome, brave and badly-needed act of statesmanship."
National Security Adviser Robert O'Brien said Mr Trump "should be a front runner for the Nobel Peace Prize" for helping to broker the deal.
"Today a new era began in the relations between Israel and the Arab world," Israeli Prime Minister Benjamin Netanyahu said.
Defence Minister and alternate prime minister Benny Gantz called on other Arab nations to advance diplomatic relations in additional peace pacts.
UNITED ARAB EMIRATES
The UAE's leader, Sheikh Mohamed bin Zayed, tweeted that "an agreement was reached to stop further Israeli annexation of Palestinian territories".
Minister of State for Foreign Affairs Anwar Gargash said: "Most countries will see this as a bold step to secure a two-state solution."
The Palestinian Authority voiced its "strong rejection and condemnation" of the deal, with President Mahmoud Abbas calling it an "aggression" against the Palestinian people and a "betrayal" of their cause, including their claim to Jerusalem as a capital of their future state.
"The agreement with the UAE is a reward for the Israeli occupation and crimes," said Mr Hazem Qasem, spokesman for Palestinian Islamist group Hamas, which controls the Gaza Strip.
China is happy to see measures that are helping to ease tensions between countries in the Middle East and promoting regional peace and stability.
CHINA'S FOREIGN MINISTRY SPOKESMAN ZHAO LIJIAN
COMMITMENT TO PALESTINE
Indonesians should respect the peace deal, but our commitment to helping Palestine will never fade away.
MR ZUHAIRI MISRAWI, an academic from Indonesia's largest Islamic organisation, Nahdlatul Ulama.
REWARD FOR CRIMES
The agreement with the UAE is a reward for the Israeli occupation and crimes.
MR HAZEM QASEM, spokesman for Palestinian Islamist group Hamas, which controls the Gaza Strip.
Israel's archenemy Iran said the Palestinian people will "never forgive the normalising of relations with the criminal Israeli occupation regime and the complicity in its crimes". The move was an act of "strategic stupidity... that will undoubtedly strengthen the resistance axis in the region", its Foreign Ministry said.
"While betraying the Palestinian cause to serve its narrow interests, the UAE is trying to present this as a kind of act of self-sacrifice for Palestine," Turkey's Foreign Ministry said. "History... will not forget and never forgive this hypocritical behaviour."
President Recep Tayyip Erdogan said Turkey would consider closing its embassy in Abu Dhabi and suspending diplomatic ties with the UAE over the accord.
Jordan said the outcome of the pact would depend on Israel's actions, including its stance on a two-state solution with the Palestinians.
Egyptian President Abdel Fattah al-Sisi said he hoped the deal to halt Israel's annexation of Palestinian land would help bring peace to the Middle East.
British Foreign Secretary Dominic Raab said: "This is a historic step... Ultimately, there is no substitute for direct talks between the Palestinians and Israel, which is the only way to a reach... a lasting peace."
UNITED NATIONS UN chief Antonio Guterres said he hoped the deal would help realise a two-state solution.