The Normalisation Framework
The Abraham Accords, signed in September 2020, represented the most significant diplomatic realignment in the Middle East since the 1979 Egypt-Israel Camp David Accords. For the UAE, normalisation with Israel was not an impulsive decision but the formalisation of a relationship that had been developing through back channels for over a decade. Security cooperation against shared Iranian threats, intelligence sharing, and quiet commercial contacts preceded the public announcement by years. The accords provided a framework to bring these interactions into the open and expand them systematically.
The agreement established full diplomatic relations, direct aviation links, visa-free travel, and a comprehensive framework for bilateral trade and investment. Within the first two years, bilateral trade exceeded USD 2.5 billion annually, with particular concentration in technology, financial services, agriculture technology, and defence systems. The UAE-Israel Business Council and multiple free zone agreements accelerated commercial integration at a pace that surprised even optimistic projections.
Economic Integration Trajectory
The commercial architecture of the normalisation has developed across several vectors. Israeli technology firms have established regional headquarters in the UAE, using the federation as a gateway to Gulf and South Asian markets. UAE sovereign wealth funds have made investments in Israeli technology startups, particularly in cybersecurity, artificial intelligence, and water technology — sectors aligned with the UAE’s own diversification priorities.
The financial services corridor has been particularly significant. Israeli banks have established correspondent banking relationships with UAE institutions, and cross-border fintech partnerships have proliferated. The CEPA negotiations between the two countries, aimed at reducing tariffs and harmonising regulatory frameworks, represent the next stage of economic deepening. For the UAE, the economic logic of normalisation is straightforward: access to one of the world’s most dynamic innovation ecosystems without the geographic proximity that historically complicated Arab-Israeli economic engagement.
Geopolitical Stress Testing
The accords have been tested by regional crises, most severely by the escalation of the Israeli-Palestinian conflict since October 2023. The UAE’s response has demonstrated the balancing act inherent in the normalisation: Abu Dhabi has maintained diplomatic relations and commercial channels with Israel while simultaneously calling for de-escalation, civilian protection, and a pathway to Palestinian statehood. This dual posture has drawn criticism from both sides — those who view continued normalisation as complicity and those who view the UAE’s humanitarian advocacy as insufficient commitment to the partnership.
The crisis has exposed a structural tension in the accords framework. The original agreement was premised on an assumption that the Palestinian issue could be managed, if not resolved, through economic development and incremental diplomatic progress. The events since late 2023 challenged that assumption and forced the UAE to navigate between its strategic investment in normalisation and the broader Arab public sentiment regarding Palestinian rights.
Regional Ripple Effects
The UAE’s normalisation catalysed a broader regional shift. Bahrain signed the accords simultaneously, and Morocco and Sudan followed within months. The prospect of Saudi-Israeli normalisation — which would represent a transformative expansion of the framework — remains a central diplomatic objective for multiple parties, though its timeline has been complicated by regional conflict dynamics.
For the UAE, the expansion of the normalisation circle serves a strategic purpose beyond bilateral relations with Israel. A broader normalisation framework creates a regional economic bloc that can collectively engage with global technology and capital markets, counterbalance Iranian influence, and establish new trade corridors — including the India-Middle East-Europe Economic Corridor (IMEC), which depends on normalised relations among its regional participants.
Risk Assessment
The primary risk to the accords’ long-term trajectory is a sustained deterioration of the Israeli-Palestinian situation that makes continued normalisation politically untenable for Arab governments. The UAE has greater insulation from domestic public pressure than more democratic regional states, but it is not immune to the broader reputational costs of association during periods of acute conflict.
A secondary risk is that the economic benefits of normalisation plateau before reaching the scale necessary to make the relationship self-sustaining independent of geopolitical circumstances. If bilateral trade and investment remain concentrated in a narrow set of sectors and firms, the commercial constituency for normalisation may prove insufficient to anchor the relationship through political storms.
Strategic Outlook
The Abraham Accords remain a foundational element of the UAE’s regional strategy. Abu Dhabi’s approach has been to deepen economic integration methodically while maintaining sufficient diplomatic flexibility to respond to regional crises without rupturing the framework. The accords’ durability will ultimately depend on whether the broader regional environment evolves toward the stability that normalisation was intended to promote, or whether sustained conflict forces a recalibration of the framework’s ambitions.