President Donald Trump said on Monday the United States would remove Sudan from its list of state sponsors of terrorism once Khartoum sets aside $335 million for payments for American victims.

The deal could also set in motion steps by Sudan toward establishing diplomatic relations with Israel, a U.S. official told Reuters, following similar U.S.-brokered moves in recent weeks by the United Arab Emirates and Bahrain. Details were still being worked out, the source said.

Rapprochement between Israel and another Arab country would give Trump a new diplomatic achievement as he seeks re-election on Nov. 3.

Sudan's designation as a state sponsor of terrorism dates to its toppled ruler Omar al-Bashir and makes it difficult for its transitional government to access urgently needed debt relief and foreign financing.

Many in Sudan say the designation, imposed in 1993 because the United States believed Bashir’s government was supporting militant groups, is now undeserved since Bashir was removed last year and Sudan has long cooperated with the United States on counter-terrorism.

U.S.-Sudanese negotiations have focused on funds that Washington wants Khartoum to deposit in escrow for victims of al-Qaeda attacks on U.S. embassies in Kenya and Tanzania in 1998, U.S. government sources said.

"GREAT news! New government of Sudan, which is making great progress, agreed to pay $335 MILLION to U.S. terror victims and families," Trump tweeted. "Once deposited, I will lift Sudan from the State Sponsors of Terrorism list. At long last, JUSTICE for the American people and BIG step for Sudan!

Trump made no mention of U.S. efforts to get Sudan to become the latest Arab state to forge ties with Israel.

Sudan had insisted that any announcement of Khartoum's de-listing not be explicitly linked to normalization with Israel. Differences remain between Sudanese political and military officials on how far and how fast to go in warming of relations with Israel.

One possibility, one U.S. official said earlier, would be for Washington to first announce Sudan's delisting and then leave it to Sudan and Israel to go public later with an agreement on establishing relations.