The two countries announced on Thursday they were establishing full diplomatic relations in a US-brokered deal that required Israel to halt its contentious plan to annex occupied West Bank land sought by the Palestinians.
Mr Netanyahu has insisted the annexation plans are only on “temporary hold” at the request of the US.
The UAE, like most of the Arab world, long rejected official diplomatic ties with Israel, saying recognition should only come in return for concessions in peace talks.
Its accord with Israel breaks that long-held tenet and could usher in agreements with other Arab states, undermining a consensus that was a rare source of leverage for the Palestinians.
“According to the Palestinians and to many others in the world who agreed with them, peace can’t be reached without conceding to the Palestinians’ demands, including uprooting settlements, dividing Jerusalem and withdrawal to 1967 lines,” Mr Netanyahu said in a video statement.
“No more. This concept of ‘peace through withdrawal and weakness’ has passed from the world.”
The Palestinians want the West Bank, east Jerusalem and the Gaza Strip for their hoped-for state and peacemaking with them since the 1990s has been based on withdrawal from those lands to make way for a Palestinian homeland.
Israel captured the territories in the 1967 Six-Day War, although it withdrew its troops and settlers from Gaza in 2005.
But what has been a wall of Arab support for the Palestinians and their demands has begun to crack in recent years, in large part because of the shared enmity of Israel and other Arab states towards Iran and Iranian proxies in the region.
Peace should be established on the basis of the Palestinian state with east Jerusalem as its capital
The Palestinians bristled at Mr Netanyahu’s remarks.
“Peace should be established on the basis of the Palestinian state with east Jerusalem as its capital,” Nabil Abu Rdeneh, a spokesman for Palestinian President Mahmoud Abba, said.
“This is the Arab and international consensus, and anything else has no value.”
Mr Netanyahu also reiterated his interpretation of the UAE deal – that annexation is only being suspended and is still on the table, so long as it was done in coordination with Washington.
UAE officials have indicated the deal means annexation has been shelved entirely.
After President Donald Trump released his Middle East plan earlier this year, which was favourable to Israel, Mr Netanyahu said he would forge ahead with annexing parts of the West Bank.
He backed away from moving forwards with annexation last month in the face of fierce international opposition and misgivings by White House officials.
But Mr Netanyahu, who has seen his popularity plummet over his handling of the coronavirus crisis, has faced searing criticism from settler leaders and their representatives in Parliament over the annexation backtrack and he has tried to reassure them that he remains committed to the move.
