US President Donald Trump on Friday formally moved to delist Sudan as a state sponsor of terrorism, a step long sought by the Arab nation which faces US pressure to normalize relations with Israel.
The White House said that Sudan's civilian-backed transitional government had deposited $335 million as part of an agreement to compensate survivors and family members of attacks that took place when former dictator Omar al-Bashir welcomed Al-Qaeda.
"Today represents a momentous step forward in the United States-Sudan bilateral relationship and marks a pivotal turning point for Sudan," a White House statement said.
The deal with Sudan allows "for a new future of collaboration and support for its ongoing and historic democratic transition," it said.
After Trump had announced his plan to delist Sudan on Monday through Twitter but before he took formal action, an Israeli delegation visited Sudan to discuss normalization.
Trump, who faces elections in little more than a week, has used his leverage over Sudan to press for recognition of Israel -- which would be another landmark step after announcements last month by the United Arab Emirates and Bahrain.
Secretary of State Mike Pompeo voiced hope on Wednesday that Sudan would "promptly" recognize the Jewish state -- a major cause for Trump's evangelical Christian base.
The Gulf Arab states had long enjoyed quiet relations with Israel but a move by Sudan would be highly significant in light of the nation's history.
Sudan played a small part in Arab-Israeli wars and, after Israel's decisive victory in 1967, Khartoum was where the Arab League issued its famous "three no's" -- no peace, no recognition and no negotiations with Israel.
Sudan has been seeking for years to remove the designation as a state sponsor of terrorism, which severely impedes investment as few foreign businesses want to risk the wrath of US prosecution.
With Trump's formal move, Congress has 45 days in which it can pass a resolution to object to the delisting.
Congress is not expected to block the delisting but it must also approve legislation to grant Sudan immunity from further claims.
Until then, the $335 million will be held in an escrow account.
The money includes compensation to survivors and family members of those killed in Al-Qaeda's twin attacks on the US embassies in Kenya and Tanzania in 1998.