It will allow Washington to revive its bogus claims of being an "honest broker", seeking the best for Palestinians, even if their leaders are supposedly too dimwitted to understand what is good for them.
Pitting the Palestinian leadership against the Gulf - as well as other Arab states, such as Jordan and Egypt, that dare not antagonise their oil-rich neighbours - will further isolate Palestinians. They can now be presented more convincingly as entrenched opponents of peace, at best - or, if they resist, as terrorists.
Netanyahu bailed outLastly, Netanyahu, who is in deep trouble at home, hopes this agreement can dig him out of his hole. He is up against a wave of protests that have rallied large sections of Israeli society, including on the right. He faces an unprecedented corruption trial. His handling of the Covid-19 pandemic looks increasingly catastrophic. The Israeli economy is imploding.
In this context, his focus on West Bank annexation alienated much of the Israeli public, and even failed to satisfy sections of the settler community, who want all of the Palestinian territories, not just large parts. A deal with the UAE - and implicitly one with the rest of the Gulf - allows him to climb down from an unpopular annexation plan.
Netanyahu has long declared himself Mr Security, the protector of Israel's interests, and the only Israeli leader capable of making dramatic moves on the global stage. Here, he appears to have done both. It has even forced his political opponents to praise his achievement.
Netanyahu has managed to pull all this off while being able to argue that annexation is still "on the table", placating his supporters among the settlers.
The agreement may yet set the stage for him to win a winter election he is widely reported to be preparing for.
No price to payThe abandonment of annexation - temporarily or otherwise - will not, of course, interrupt Israel's continuing capture of ever more Palestinian land in the occupied West Bank, nor its relentless campaign of ethnic cleansing.
Netanyahu has demonstrated to Israelis that he was right. Israel could violate international law, steal land, commit war crimes - and western and Arab states would stomach it all. Israel would have to pay no price for its behaviour.
Haaretz recalled on Friday that, when asked in 2018 whether concessions to Palestinians initiated in the Oslo Accords had gradually led to improvements in relations with the Arab world, Netanyahu responded that it was the "exact opposite".
By first recruiting the West and Arab regimes to Israel's side, he said, Israel would "become so strong" that it would force Palestinians to "understand that they have no choice but to compromise with us" - his term for absolute submission.
For Netanyahu, a strategic alliance with the Gulf - at the expense of Palestinians - has always been about more than just grabbing the occupied territories. It is central to his vision of an unreformed, maximalist, ethnic supremacist, Israeli state secure in the Middle East, serving as a regional hegemon alongside US global power.
Now, with this deal, Netanyahu believes he is in sight of the finishing line.
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