"Today, Israel and the United Arab Emirates have taken a historic step to bridge the deep divides of the Middle East," the former vice president and foreign policy stalwart said in a statement about the deal which was announced by his election rival, US President Donald Trump.

"The UAE's offer to publicly recognize the State of Israel is a welcome, brave, and badly-needed act of statesmanship" that will help ensure Israel remains an "integral" part of the Middle East, he said.

In the bombshell agreement, the Jewish state agreed to suspend its plans to annex occupied Palestinian West Bank areas in exchange for a normalization of relations with the UAE.

"Annexation would be a body blow to the cause of peace, which is why I oppose it now and would oppose it as president," Biden said. "It would virtually end any chance of a two-state solution."

Biden's statement made no mention of Trump, saying instead that the deal was built on efforts by "multiple administrations," including the Obama-Biden administration that preceded Trump's, to foster a broader Arab-Israeli opening.

Several US lawmakers hailed the agreement, with many Republicans praising Trump and his team for helping bring about a result.

House Democrat Brad Sherman said "Israel's willingness to step away from annexation in favor of expanding ties with its neighbors demonstrates a real commitment to stability, peace & a viable Palestinian state."