Trump delivered the news after he spoke by phone to Bahrain’s King Hamad bin Isa Al Khalifa and Israeli Prime Minister Benjamin Netanyahu, the White House said.
"This is truly a historic day," Trump told reporters in the Oval Office, saying that he believed other countries would follow suit.
"Opening direct dialog 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," the United States, Bahrain and Israel said in a joint statement.
A month ago, Bahrain's fellow Gulf Arab state, the United Arab Emirates, agreed to normalize ties with Israel under a U.S.-brokered deal which is scheduled to be signed at a White House ceremony hosted by Trump on Sept. 15.
DONALD TRUMP: Thank you very much. Just a few moments ago, I hosted a historic call between prime Minister Benjamin Netanyahu, of Israel, and King Hamad Al Khalifa, of Bahrain. Both leaders expressed their condolences as well to the American people on this very, very tragic, horrible event that took place on September 11. And they very much meant it. I want to thank them for that.
There's no more powerful response to the hatred that spawned 9/11 than the agreement that we're about to tell you. You will hear something today that's, I think, very, very important for not only the Middle East but for the world. In the spirit of peace and cooperation, both leaders also agree that Bahrain will fully normalize its diplomatic relations with Israel. They will exchange embassies and ambassadors, begin direct flights between their countries, and launch cooperation initiatives across a broad range of sectors, including health, business, technology, education, security, and agriculture.
This is a truly historic day. This is really something-- very special, very, very, special. As more countries normalize relations with Israel, which will happen quite quickly we believe, the region will become more and more stable, secure, and prosperous.
In the meantime, we're pulling most of our soldiers out, so we're doing it the opposite way. They were doing it with nothing but fighting and blood all over the place. The sand was loaded up with blood. And now you're going to see that a lot of that sand is going to be loaded up with peace.