Oman's foreign ministry announced it will open an embassy on the West Bank on Wednesday.
The diplomatic mission will be located in the West Bank city of Ramallah.
"The Sultanate [of Oman], which continues its support of the brotherly Palestinian people, has approved to open a new Omani diplomatic delegation at the level of an embassy in Palestine," Oman's Ministry of Foreign Affairs said in a tweet.
"A delegation from the Ministry of Foreign Affairs will travel to Ramallah to start with the opening procedures."
The step coincides with the US-led economic workshop in Bahrain to unveil a Middle East peace plan, which is not expected to recognise an independent Palestinian state.
The UAE, Jordan and Morocco all have diplomatic missions in Ramallah.
Last year, the US downgraded its mission to Palestine, merging it with their embassy to Israel, which they moved to Jerusalem.
In Bahrain, Jared Kushner, an adviser to President Donald Trump, has been selling his plan for Middle East peace that seeks US$50 billion (Dh184bn) in investment in the form of more than 150 projects. It has been criticised for failing to tackle tough political and statehood issues.