Palestine and Arab countries agreed to include an emphasis in the final agreement on commitment to a 2002 Arab Peace Initiative, two-state solution and the land-for-peace principle, the source said on condition of anonymity.

They agreed not to include a clear condemnation of the UAE-Israel deal, according to the source.

The source said some Arab states, attempted to add provisions to give a form of legitimacy to the normalization deal. Those countries were not named.

“In response, Palestine presented a draft resolution that condemns the UAE-Israel normalization deal,” the source said. “The Arab countries, however, voted down the draft,” he added.

Hamas voiced regret about the Arab League's decision. 

“It is regrettable for the Arab League to drop a draft resolution condemning the normalization agreement between the Emirates and the Zionist entity,” spokesman for the group, Hazem Qassem, told Anadolu Agency.

"The inability to issue this decision emboldens the Israeli occupation and the American administration to continue implementing their plan aiming at terminating the Palestinian cause," he added.

The decision amounts to "official Arab legislation for normalization," said Palestine Liberation Organization (PLO) Executive Committee member Ahmed Majdalani.

"What happened is clear and expected. The coalition supporting the UAE is the strongest in the Arab League and the most influential," he told Anadolu Agency. "The inability to condemn the UAE means a new policy is being adopted in the Arab League that allows any Arab country to establish relations with Israel, and bypass the Arab peace initiative of 2002.” 

Palestinian Foreign Minister Riyad al-Maliki urged Arab nations earlier Wednesday to reject the UAE-Israel deal.

On Aug. 13, the UAE and Israel announced a US-brokered agreement to normalize relations, including opening embassies in each other's territory.

*Ahmed Asmar contributed to this report from Ankara