President Donald Trump has designated Saudi Arabia a major non-NATO ally of the United States during a visit by Saudi Crown Prince Mohammed bin Salman to Washington, DC, where the two leaders reached agreements covering arms sales, civil nuclear cooperation, artificial intelligence and critical minerals.

During a formal black-tie dinner at the White House on Tuesday evening, Trump made the announcement that he was taking “military cooperation to even greater heights by formally designating Saudi Arabia as a major non-NATO ally”.

Trump said the designation was “something that is very important to them, and I’m just telling you now for the first time because I wanted to keep a little secret for tonight”.

The designation means a US partner benefits from military and economic privileges but it does not entail security commitments.

Saudi Arabia and the US also signed a “historic strategic defence agreement”, Trump said.

A White House fact sheet said the defence agreement, “fortifies deterrence across the Middle East”, makes it easier for US defence firms to operate in Saudi Arabia and secures “new burden-sharing funds from Saudi Arabia to defray US costs”.

The White House also announced that Trump had approved future deliveries of F-35 fighter jets to Saudi Arabia while the kingdom had agreed to purchase 300 American tanks.

Saudi F-35 deal raises questions about Israel’s ‘qualitative military edge’

Saudi Arabia’s purchase of the stealth fighter jets would mark the first US sale of the advanced fighter planes to Riyadh. The kingdom has reportedly requested to buy 48 of the aircraft.

The move is seen as a significant policy shift by Washington that could alter the military balance of power in the Middle East, where US law states that Israel must maintain a “qualitative military edge”.

Israel has been the only country in the Middle East to have the F-35 until now.

Asked by Al Jazeera’s Kimberly Halkett about the impact of the jet fighter deal on Israel’s “qualitative military edge”, Trump said he was aware that Israel would prefer that Riyadh receive warplanes of “reduced calibre”.

“I don’t think that makes you too happy,” Trump said, addressing the crown prince, who was seated beside him in the White House.

“They’ve been a great ally. Israel’s been a great ally. … As far as I’m concerned, I think they are both at a level where they should get top of the line,” Trump said of the F-35 deal.

Al Jazeera’s Alan Fisher, reporting from the White House, said part of the almost $1 trillion investment in the US announced by Prince Mohammed included $142bn for the procurement of the F-35 fighter jets, “the most advanced of their kind in the world”.

Fisher also said the Israeli government and lobbyists had tried to block the sale of F-35s to Saudi Arabia.

The agreements announced were about “much more” than Saudi investment in the US, he added.

“It’s about helping each other’s economy, business and defence. Politics isn’t near the top of the agenda, but both countries believe these deals could create a political reset in the Middle East,” Fisher said.

‘A clear path’ for Palestinian state

The two countries also signed a joint declaration on the completion of negotiations on civil nuclear energy cooperation, which the White House said would build the legal foundation for a long-term nuclear energy partnership with Riyadh.

Israeli officials had suggested that they would not be opposed to Saudi Arabia getting F-35s as long as Saudi Arabia normalises relations with Israel under the Abraham Accords framework.

The Saudis, however, have said they would join the Abraham Accords but only after there is a credible and guaranteed path to Palestinian statehood, a position Prince Mohammed repeated in the meeting with Trump.

“We want to be part of the Abraham Accords, but we want also to be sure that we secure a clear path of a two-state solution,” he said.

“We’re going to work on that to be sure that we come prepared for the situation as soon as possible to have that,” he added.