The peace agreement between Israel and the UAE lays the foundation for a future Israeli-Arab alliance, which has been quietly developing behind the scenes over the past several years. I believe that over a relatively short period of time, such an alliance will emerge, eventually including nine Arab States: the UAE, Bahrain, Oman, Saudi Arabia, Jordan, Egypt, and at a later date, Kuwait, Qatar, and the Palestinians, creating a crescent of land extending from the Gulf to the Mediterranean. Such a new alliance will more than likely also include Sudan, Morocco, and other Arab states, and will decisively change the geostrategic dynamic in the Middle East.
It has been long since the Arab states ruled out military confrontation with Israel, not only because Israel is militarily formidable and is an unshakable reality with whom they have no direct conflict. To the contrary, they view Israel as a regional nuclear power that can face off against Iran, their common enemy, which will serve their mutual national security interests. In addition, the Arab states and Israel have become wary of Turkey's President Erdogan meddling in the region to promote his neo-Ottoman agenda.
Finally, the Arab states have concluded that they can no longer sacrifice their national interests on the altar of Palestinian intransigence to reach a peace agreement with Israel. The fact that the Arab states have come to appreciate Israel's extraordinary advances in just about every field of science and the benefits from that which they have already been gaining during the last decade, also played an important role in the transformational process that will give birth to the alliance.
The impact on Iran's future regional design I believe that Iran's decade-long threats against Israel and the Gulf states was the main cause behind the Israel-UAE deal, which will likely lead to the establishment of an alliance in the near future. An alliance's implications for Iran would be of historic proportion. Iran has for many years been trying to consolidate its own 'crescent' from the Gulf to the Mediterranean, through Iraq, Syria, and Lebanon.
Iran will soon face an impenetrable parallel crescent of an Israeli-Arab alliance with a formidable military power that includes nuclear weapons in the hands of the Israelis. Unlike the emerging alliance in which every country will have a high stake and will be resolute to maintain and strengthen it, conversely Iran's presence in Iraq, Syria, and Lebanon is tenuous at best. In Iraq there is a growing movement that wants Iran out of the country, and the Iraqi government does not seem to be inclined to suppress it.
In Syria, Iran is under a constant Israeli assault while Russia does not want Tehran to deeply entrench itself in the country. Lebanon is in turmoil; although Hezbollah exerts immense political influence in the country, the group does not want to confront Israel militarily and remains at the mercy of Iran, whose economy is battered and supply chain of military hardware is regularly attacked by Israel.
All the same, the Lebanese government has no quarrel with Israel and given the likely emergence of the Israeli-Arab alliance, Lebanon, including Hezbollah, will have to recalibrate their political standing in the face of this likely new emerging reality.
Iran understands the implications of the Israeli-UAE peace deal and all Rouhani musters to state is that "They [the UAE] better be mindful. They have committed a huge mistake, a treacherous act. We hope they will realize this and abandon this wrong path."
Iran will face two choices: a) continue its aggressive policies by supporting extremist radical groups, and maintain its efforts to subvert the Gulf states while pursuing the development of nuclear weapons and suffering from the continuing sanctions and an Israeli military and cyber onslaught; or b) accept the new developing reality, curb its nuclear ambitions and agree to enter into new negotiations with the US, salvage its economy, and prevent a regime change, which is front and center in their concerns.
Iran will certainly test the grounds first before it changes its posture to ascertain the extent of and speed with which the new emerging alliance will blossom, what will be its military components, and the degree to which the US will be involved. Tehran may well show more restraint in the coming months and will likely opt for the second option to save its economy from a total collapse and preserve the regime, especially since the alliance, once in place, will severely impede its hegemonial ambitions and force it to abandon its strategy of confrontation.
A game changer for the Palestinians
As a new alliance emerges, it will have serious implications on the Palestinians. From the time the Israeli-Egyptian peace treaty was signed in 1979, through the 1993 Oslo Accords and the Israeli-Jordanian peace treaty in 1995, to the introduction of the Arab Peace Initiative in 2002, the Palestinians missed every opportunity to reach a peace agreement with Israel based on a two-state solution. The Arab states' decades-long backing of the Palestinians began to gradually erode as they realized that they have become hostage to the Palestinians' recalcitrance, and were no longer willing to sacrifice their national interests by supporting a 'lost' cause.