Israel and the United Arab Emirates agreed to reciprocal visa-free travel, making Emirati citizens the first in the Arab world to not require Israeli entry permits.
The deal was signed after the first-ever official delegation from the UAE landed in Israel for a day of talks following an agreement to normalise ties signed at the White House last month.
Israeli Prime Minister Benjamin Netanyahu, wearing a mask as he greeted the UAE delegation at Ben Gurion airport near Tel Aviv, described the visit as "a glorious day for peace".
"Today, we are making history in a way that will stand for generations," the right-wing premier said of the Israeli-UAE accord, which has been angrily denounced by the Palestinians.
The two states signed four agreements on Monday, including one "exempting our nationals from visas", Netanyahu announced, arguing that free movement of people would offer benefits to the Israeli and Emirati economies.