Bahrain has become the second Gulf nation to establish full diplomatic relations with Israel, joining the United Arab Emirates in normalizing ties with the Jewish state and reshaping politics in the Middle East.

Bahraini officials said the agreement will help promote peace in the region, a position that is not shared by its neighbor Iran. The government in Tehran, which supports the island nation’s majority Shiite population, warned the deal will further destabilize the region.

“This is a historic breakthrough to further peace in the Middle East,” said a joint statement on Friday between the US, Bahrain and Israel. “Opening direct dialogue and ties between these two dynamic societies and advanced economies will continue the positive transformation of the Middle East.”

President Donald Trump praised the move by Bahrain, coming days before he was already scheduled to host leaders from Israel and the UAE in Washington for a signing ceremony at the White House. He said the nations’ leaders had shown “vision and courage” by reaching the accord and confirmed that Bahrain’s foreign minister would join the Sept. 15 event.

The move will bolster Trump’s claims ahead of the November election to be helping bring peace to the Middle East and seeing success in efforts to extract US forces from the region. It will also come as a welcome development for Israeli Prime Minister Benjamin Netanyahu, whose support domestically has taken a hit over corruption charges and his response to the Covid-19 pandemic.

Alarm in Iran

The events have been seen with alarm by officials in Iran and the Palestinian territories. Palestinian officials quickly denounced the agreement as a betrayal of their cause and a “torpedoing” of an Arab-led peace initiative. The Palestinian government recalled their ambassador to Bahrain soon after the announcement.

Iran’s foreign ministry condemned the agreement.

“From now on, the rulers of Bahrain will be complicit in Israel’s murders as a source of constant threat to the region and the Islamic world,” the ministry said in a statement posted on its official Telegram channel. It warned against “any insecurity posed by Israel,” adding it will hold Bahrain responsible for all consequences.

Ehud Yaari, an overseas fellow at the Washington Institute for Near East Policy, said Bahrain is very sensitive to Iran and has a clear interest in its Shiite population. “So one wonders whether the Iranians will find it in their interest to respond by trying to ignite some domestic trouble in Bahrain,” he said.

Since taking office, the Trump administration has sought to build a unified coalition in the region against Tehran while pushing an Israeli-Palestinian peace plan that had minimal input by Palestinian leaders, who long ago said Trump’s embrace of Israel made the US an unacceptable partner in negotiations.

The announcement of the Bahrain move, on the anniversary of the Sept. 11, 2001, terror attacks, follows the arrival of Secretary of State Michael Pompeo in Qatar earlier in the day to jump start talks between Afghanistan’s government and the Taliban.

“The sand was loaded up with blood and now we’re going to see a lot of that sand is loaded up with peace,” Trump said, referring to the Middle East.

Trump will host Netanyahu, Bahrain’s foreign minister and a representative from the UAE next week for the signing ceremony. Friday’s announcement came with praise from Netanyahu and Bahrain King Hamad bin Isa al-Khalifa for Trump’s “dedication to peace in the region” and the “pragmatic and unique approach he has taken to bringing the nations together.”

In a statement released by his office, Netanyahu said “this is a new era of peace” that “will lead to very large investments in the Israeli economy.”

In a phone interview with the Saudi-owned Al Arabiya television channel, Bahraini Foreign Minister Abdullatif Al-Zayani dismissed Iran’s criticism of the deal as “expected” and accused its neighbor across the Gulf of trying to destabilize the region.

“Peace is a strategic choice for the Muslim community,” he said, adding that Bahrain had chosen to make the deal based on its own “higher security interests” and that its support for the Palestinians and a two-state solution remained “steadfast.”

Speculation over whether Bahrain could be next to establish ties with Israel had been building in recent weeks, with White House officials repeatedly signaling other countries could follow the UAE.

Saudi Signal

While Bahrain is a tiny island with the smallest economy among the six Gulf Cooperation Council members, its decision to formalize relations with Israel is certain to prompt debate over whether its larger neighbor and ally Saudi Arabia — to which it’s connected by a causeway — may have tacitly approved the deal.

Ayham Kamel, head of Middle East and North Africa at Eurasia Group, which advises clients on political risk, said Bahrain’s decision “is implicitly a signal from Riyadh that it has granted its blessing to the normalization of relations with Israel. Saudi Arabia is unable and unwilling to join normalization without concessions to the Palestinians but is at the same time seeking a new regional order.”

The Trump administration has compared the agreements with Israel to the historic Camp David accords in 1978, when Egypt formally recognized Israel, and Jordan’s decision to establish ties with the Jewish state during the Clinton administration in the 1990s.

In a nod to that past, Egyptian President Abdel-Fattah El-Sisi welcomed the deal, saying on Twitter that he values “this important step toward establishing stability and peace in the Middle East.”