Israel and Sudan have agreed to take steps to normalise relations in a deal brokered with the help of the United States, making Khartoum the third Arab government to set aside hostilities with Israel in the past two months.
US President Donald Trump, seeking re-election on November 3, sealed the agreement in a phone call with Israeli Prime Minister Benjamin Netanyahu and Sudanese Prime Minister Abdalla Hamdok and Transitional Council Head Abdel Fattah al-Burhan, senior US officials said.
Trump's decision this week to remove Sudan from the US list of state sponsors of terrorism paved the way for the accord with Israel, marking a foreign policy achievement for the Republican president as he seeks a second term trailing in opinion polls behind Democratic rival Joe Biden.
Netanyahu hailed it as a "new era" for the region but the Palestinian leadership, watching as more of their Arab brethren appear to give their quest for statehood a lower priority, called it a "new stab in the back".
Israel and Sudan plan to begin by opening economic and trade links, with an initial focus on agriculture, a joint statement said. A senior US official said such issues as formal establishment of diplomatic ties would be resolved later.
Trump touted the deal to reporters in the Oval Office with the Israeli and Sudanese leaders on the line in a three-way phone call, saying at least five other countries wanted to follow suit and normalise relations with Israel.
"Do you think 'Sleepy Joe' could have made this deal?" Trump asked Netanyahu, using the president's pejorative nickname for Biden. "Somehow I don't think so."
Netanyahu, reliant on bipartisan support for Israel in Washington, responded: ""Well, Mr President, one thing I can tell you, is, um, uh, we appreciate the help for peace from anyone in America."
In recent weeks the United Arab Emirates and Bahrain became the first Arab states in a quarter of a century to agree to formal links with Israel, forged largely through shared fears of Iran.
Trump insisted the Palestinians also "are wanting to do something" but offered no proof. Palestinian leaders have condemned Arab overtures to Israel as a betrayal of their nationalist cause and refuse to engage with the Trump administration, seeing it as biased in favour of Israel.
Trump announced on Monday he would take Sudan off the terrorism list once it had deposited $335 million ($A469 million) it had pledged to pay in compensation.
Khartoum has since placed the funds in a special escrow account for victims of al-Qaeda attacks on US embassies in Kenya and Tanzania in 1998.
Iran's foreign ministry described the deal as "phoney" and accused Khartoum of paying a ransom in return for Washington removing it from the terrorism list.
Sudan's terrorist designation in 1993 dates to its toppled ruler Omar al-Bashir and has made it difficult for its transitional government to access urgently needed debt relief and foreign financing.
Australian Associated Press