Trump lifts sanctions on Sudan as he announces deal between African nation and Israel

President Donald Trump formally notified Congress on Friday that his administration will remove Sudan from the list of state sponsors of terrorism, nearly 30 years after the African country was first listed.

In a historic joint call afterwards, he also announced a "very special deal" between Israel and Sudan -- marking the third Arab country to move toward normalizing relations with the Jewish state in an election-season push by his administration.

It's unclear if Sudan, which had pushed back on the White House efforts, is formally recognizing Israel or ending hostilities against it after decades of tensions.

Either way, Friday's events mark a historic new chapter, 18 months after the Sudanese people overthrew their strongman leader in mass protests. Facing fuel and food shortages and sky-high inflation, Sudan is desperate for international assistance, humanitarian aid, and foreign investment, all of which have been stymied or outright blocked by U.S. sanctions.

Despite the advances, several critical hurdles remain, including for the U.S. victims of terror attacks who have legal claims against Sudan.

In an agreement reached between the State Department and Sudan's transitional government, the country agreed to pay $335 million to the victims of the 1998 U.S. embassy bombings in Kenya and Tanzania, victims of the USS Cole attack, and the family of murdered USAID employee John Granville.

The White House confirmed Friday that those funds were now in escrow, triggering Trump's pending formal notification to Congress. But none of that money will be paid out until lawmakers resolve Sudan's "legal peace," and after a deal to do so fell apart last month, several sources warned there's no resolution in sight.

In the meantime, Trump celebrated the announcements Friday, by touting his deal-making abilities: "Do you think Sleepy Joe could have made this deal, Bibi?" he asked Israeli Prime Minister Benjamin Netanyahu over a speakerphone, referring to former Vice President Joe Biden the morning after their last debate.

"There are many, many more coming," Trump added, after the United Arab Emirates and Bahrain announced normalized relations with Israel earlier this fall. Few in the Oval Office were wearing masks.

Sudan's prime minister Abdalla Hamdok had resisted relations with Israel, saying his transitional government did not have the authority to do so. Hamdok is the civilian leader, sharing power with Gen. Abdel Fattah al Burhan, chair of Sudan's Transitional Military Council, after the military ousted Omar al Bashir, a murderous dictator who led the country from 1989 to 2019. After mass demonstrations ousted Bashir, the military seized power, but later agreed to a transition to democracy because of continued demonstrations.

Both leaders joined the call, thanking Trump for lifting the state sponsor of terrorism designation -- the most stringent of U.S. sanctions: "We very much look forward to building on this relationship and establishing strong political and economic relations between our nations and the rest of the world," said Hamdok.

It's unclear if Sudan is now formally recognizing Israel. When asked, Trump declined to answer during the Oval Office photo op, although a joint statement issued by the White House said Israel and Sudan had agreed to "the normalization of relations... and to end the state of belligerence between" them. That's a particularly symbolic moment, given that Sudan hosted the 1967 Arab League summit where members agreed to no peace or negotiations with and no recognition of Israel.

The two countries will hold talks in the coming weeks agriculture, aviation, migration issues, and economic and trade relations, according to the joint statement. The U.S. will also lobby to reduce Sudan's dbt and work with others on "improving food security" and "tapping into [Sudan's] economic potential," per the statement. A congressional aide told ABC News that includes a major shipment of wheat in the coming weeks.

Trump's focus on Israel overshadowed the historic nature of the U.S. moving to lift sanctions on Sudan, providing a renewed opportunity as the transitional government struggles to provide for the Sudanese people.

While the formal notification has not yet been delivered to Congress, it can now happen because Sudan transferred the $335 million for terror victims to a European bank, according to a congressional aide and a source briefed on the matter.

But no victim will see a dime until legal peace is resolved, according to the sources, and there's a clock ticking down because the money was loaned to Sudan from the African Export-Import Bank. If the money is not transferred within a certain time period, Sudan would face penalties and likely take the funds back.

The White House said it would push Congress to reestablish Sudan's "legal peace" -- a legal term that means as a sovereign country, it cannot be sued.

Sudan's listing on the state sponsors of terrorism list in 1993 waived that immunity, but before Congress returns it, some lawmakers have concerns about protecting ongoing litigation by victims of the Sept. 11 attacks, whose claims could be wiped out once the state sponsor of terrorism designation is lifted.

An agreement to resolve those issues fell apart last month, sources told ABC News at the time. But a deal to resolve the issue is taking shape in Congress, three sources told ABC News this week.

It could extend 9/11 victims' right to sue Sudan under different laws, by either strengthening the Justice Against State Sponsors of Terrorism Act, which allows lawsuits against countries found directly responsible for terror attacks, or by providing an exception under the Foreign Sovereign Immunities Act, which prohibits lawsuits except against designated state sponsors of terror.

Sudan has not been found liable for the Sept. 11 attacks. The 9/11 Commission, the independent body that investigated the attacks, found that Osama bin Laden did have a vast business empire in Sudan, but after "bin Ladin left in 1996, it appears that the Sudanese government expropriated all his assets; he left Sudan with practically nothing. Nor were bin Ladin's assets in Sudan a source of money for al Qaeda."

Still, families and victims like Kristen Breitweiser want their day in court, seeking a judgment on whether Sudan's past support for al Qaeda makes them at all responsible.

"I just want the opportunity to hold terrorists accountable in court. Is that so much to ask as a victim 20 years later? And yet, my president took that away from me -- never even considered me, and my 2900 other friends and family members. We weren't even part of the analysis," Breitweiser told ABC News Thursday.

"It would seem very clear that normalizing relations with Israel, allowing countries like the Emirates and Saudi to have lucrative business interests addressed, General Electric having business interests addressed is apparently more important than making sure that this nation's largest group of terrorist victims is given a path to justice. At the end of the day, what's happening here is that our rights to hold terrorists accountable is being swept away," Breitweiser added. "It's reprehensible that that's happening in my own country."

Citing their concerns over the 9/11 victims, Senators Chuck Schumer, D-N.Y., and Bob Menendez, D-N.J., have held up the legal peace legislation so far.

But the congressional aide and source familiar expressed concern that without a resolution on legal peace soon, the whole deal will fall apart -- with no funds available for the embassy and USS Cole victims, no chance for 9/11 victims to sue, and delayed assistance to Sudan.

ABC News's Ben Gittleson contributed to this report.