JERUSALEM (AFP) - Israeli Prime Minister Benjamin Netanyahu said Thursday (Aug 13) he agreed to delay annexation in the occupied West Bank as part of a normalisation deal with the UAE but the plans remain "on the table".

The pact first announced by President Donald Trump includes an agreement from Israel to "suspend" its plans to annex Jewish settlements and territory in the occupied West Bank.

Speaking after US President Donald Trump's announcement, Netanyahu said he had agreed to delayed annexation plans, but that the project remained "on the table".

"I will never give up our rights to our land," the right-wing premier said.

Netanyahu told a televised news conference: "Today a new era began in the relations between Israel and the Arab world."

Netanyahu, like many in the Jewish state, refers to the occupied West Bank as Judea and Samaria and claims the territory as part of the historic homeland of the Jewish people.

Israeli plans to annex roughly 30 per cent of the West Bank, as outlined in a Trump Middle East peace proposal unveiled in January which triggered global outcry and threats of retaliation against the Jewish state, including from the European Union.

Israel's alternate prime minister and Defence Minister, Benny Gantz, called the agreement "important and significant".

"I call upon other Arab nations to advance diplomatic relations in additional peace agreements," he said.

Once the deal is signed, the UAE will become the third Arab nation to have full diplomatic ties with Israel, following Israeli peace deals with Egypt and Jordan.

Hours after the deal was announced, the Emirati flag was projected onto Tel Aviv's town hall.