Israel's parliament voted Thursday in favour of normalisation of ties with the United Arab Emirates after a marathon debate with over 100 speeches lasting more than eight hours.
A total of 80 lawmakers voted to approve the US-brokered agreement, with 13 from the Arab-led Joint List against.
"This historic agreement... will bring us closer to other countries in the region to sign other peace agreements," Prime Minister Benjamin Netanyahu said.
Netanyahu said Israel had contact recently with another country in the region for the first time, but did not reveal its name.
The UAE in August became the first Arab state to establish relations with Israel since Egypt in 1979 and Jordan in 1994. It was quickly followed by Bahrain.
The US-brokered deals were formalised at the White House on September 15.
The Gulf agreements were condemned by the Palestinians as a "betrayal", and broke with years of Arab League policy on the Israeli-Palestinian conflict.
The US administration is trying to broker similar deals with other Arab states.