Israel and Bahrain agreed to establish full diplomatic relations on Friday in a second breakthrough between Israel and its Arab neighbors after it normalized ties with the United Arab Emirates (UAE) last month. 

The latest agreement was finalized during a telephone call between Israeli Prime Minister Benjamin Netanyahu and Bahrain King Hamad bin Isa Al Khalifa, according to a joint US-Bahrain-Israel statement published on Twitter by US President Donald Trump.

The statement hailed the agreement as a "historic breakthrough" that it said would further peace in the region. 

"Opening direct dialogue and ties between these two dynamic societies and advanced economies will continue the positive transformation of the Middle East and increase stability, security and prosperity in the region," it said.

Addressing reporters in the Oval Office as the US commemorated the Sept. 11, 2001 terrorist attacks, Trump touted the agreement, saying that when he assumed office in 2017 the Middle East was "in a state of absolute chaos."

"Even great warriors get tired of fighting, and they’re tired of fighting," he said. "I can see a lot of good things happening with respect to the Palestinians."

The decision to normalize ties comes one week before the UAE and Israel are set to formally sign their pact during a White House ceremony with Trump hosting Netanyahu and Emirati Foreign Minister Mohammed bin Zayad. 

The Palestinian leadership previously denounced the UAE-Israel deal, saying it does not serve the Palestinian cause and ignores the rights of Palestinians.

The Palestinian Authority said any deal with Israel should be based on the 2002 Arab Peace Initiative on the principle of "land for peace" and not "peace for peace."