The Abraham Accords would allow Jews and Arabs “to live together, pray together and dream together”, the US president said.
Israel’s Prime Minister Benjamin Netanyahu also hailed the signing of the treaties saying they “bring hope to all of the children of Abraham.”
He added: ”The blessings of peace that we make today will be enormous …. first because this peace will eventually expand to include other Arab states, and ultimately, it can end the Arab-Israel conflict once and for all.”
He commended President Trump and at one point said: ”You have a key to the hearts of the Jewish people.”
The Gulf states became the third and fourth Arab countries to recognise Israel since its founding in 1948.
Before the UAE and Bahrain, the only other Arab countries in the Middle East to officially recognise Israel were Egypt and Jordan, which signed peace treaties in 1978 and 1994 respectively.
The Israeli army said on Tuesday that two rockets were fired from the Gaza Strip into Israel while the ceremony was under way.
Mr Trump and Mr Netanyahu had met ahead of the official events.
The agreements will improve the prospect of new security ties in a region where many of the Gulf Arab states share Israel’s opposition to the regime in Iran.
Although the details remain unknown, the agreements, will normalise diplomatic relations between Israel and U.A.E. and Bahrain, including the establishment of the first embassies in one another’s countries.
Israel and the U.A.E. recently announced the start of the first commercial flights between them.