The UAE and Israel have had unofficial diplomatic contacts and cooperation for more than a decade. Meanwhile Netanyahu has realized that his campaign promise to annex a chunk of the West Bank was going to trigger a bad reaction internationally and he needed a good excuse to walk that back after delaying the annexation decision for the past few weeks.
This is really just making the unofficial relations official and giving Bibi a convenient excuse to weasel out of his campaign promise to the right. The only really significant thing about this is the UAE is proving that Arab states can make their unofficial ties with Israel official without getting suffering a big negative reaction from "the Arab Street." The Arab Street is more concerned with their own rights than Palestinian rights these days, and maybe it was a paper tiger all along. But it is interesting that Netanyahu seemed more afraid of European blowback in defense of the Palestinian cause than the Emiratis worried about Arab blowback for that cause.
