President Donald Trump has kicked off his trip to the Gulf with a surprise announcement that the United States will lift long-standing sanctions on Syria, as well as securing a $600 billion commitment from Saudi Arabia to invest in the US.

The US agreed to sell Saudi Arabia an arms package worth nearly $142 billion, according to the White House which called it "the largest defence cooperation agreement" Washington has ever done.

Trump in Saudi speech urges Iran toward a 'new and a better path' as he pushes for nuclear deal. – AP

The surprise announcement about sanctions on Syria would be a huge boost for a country that has been shattered by more than a decade of civil war. Rebels led by current President Ahmed al-Sharaa toppled president Bashar al-Assad last December.

Speaking at an investment forum in Riyadh at the start of a deals-focused trip that also brought a flurry of diplomacy, Trump said he was acting on a request to scrap the sanctions by Saudi Arabia's de facto ruler, Prince Mohammed bin Salman.

"Oh what I do for the crown prince," Trump said, drawing laughs from the audience.

He said the sanctions had served an important function but that it was now time for the country to move forward.

The move represents a major US policy shift. The US declared Syria a state sponsor of terrorism in 1979, added sanctions in 2004 and imposed further sanctions after the civil war broke out in 2011.

Syrian Foreign Minister Asaad al-Shibani said online that the planned move marked a "new start" in Syria's path to reconstruction.

Trump has agreed to briefly greet Sharaa in Saudi Arabia, a White House official said.

Trump and bin Salman tour exhibits during Saudi-US Investment Forum. – Reuters

Trump and the Saudi crown prince signed an agreement covering energy, defence, mining and other areas. Trump has sought to strengthen relations with the Saudis to improve regional ties with Israel and act as a bulwark against Iran.

The agreement covers deals with more than a dozen US defence companies in areas including air and missile defence, air force and space advancement, maritime security and communications, the fact sheet said.

The Saudi prince said the deal included investment opportunities worth $600 billion, including deals worth $300 billion that were signed during Trump's visit.

"We will work in the coming months on the second phase to complete deals and raise it to $1 trillion," he said.

Saudi Arabia is one of the largest customers for US arms.

Reuters reported in April the US was poised to offer the kingdom an arms package worth well over $100 billion.

"I really believe we like each other a lot," Trump said during a meeting with the crown prince, Saudi Arabia's de facto ruler.

The US and Saudi Arabia had discussed Riyadh's potential purchase of Lockheed F-35 jets, two sources briefed on discussions told Reuters, referring to a military aircraft that the kingdom is long thought to have been interested in.

AP Explains: Saudi crown prince welcomes Trump as US leader begins four-day Middle East tour. – AP

It was not immediately clear whether those aircraft were covered in the deal announced on Tuesday.

Saudi Arabia is one of the largest customers for US arms, and the two countries have maintained strong ties for decades based on an arrangement in which the kingdom delivers oil and the superpower provides security.

But relations were strained after the 2018 murder of US-based Saudi journalist Jamal Khashoggi by Saudi agents in Istanbul caused a global uproar. US intelligence concluded that bin Salman approved an operation to capture or kill Khashoggi, a prominent critic, but the Saudi government has denied any involvement.

Trump did not mention the incident during his visit and called bin Salman an "incredible man".

"I really believe we like each other a lot," Trump said.

Trump will go on from Riyadh to Qatar on Wednesday and the United Arab Emirates on Thursday in a trip that is focused on investment rather than security matters in the Middle East.

Several US business leaders attended the event, including Elon Musk, the Tesla chief who has led a government-downsizing effort for Trump in Washington; OpenAI CEO Sam Altman; BlackRock CEO Larry Fink and Blackstone CEO Stephen Schwarzman.

Trump was shown speaking with several Saudi officials, including sovereign wealth fund governor Yasir al-Rumayyan, Aramco CEO Amin Nasser and investment minister Khalid al-Falih as he viewed models for the kingdom’s flashy, multi-billion-dollar development projects.

President Trump visits Saudi Arabia's Al Yamamah Palace. – AP

Bin Salman has focused on diversifying the Saudi economy in a major reform program dubbed Vision 2030 that includes "Giga-projects" such as NEOM, a futuristic city the size of Belgium. Oil generated 62 per cent of Saudi government revenue last year.

The kingdom has scaled back some of its ambitions as rising costs and falling oil prices weigh.

"While energy remains a cornerstone of our relationship, the investments and business opportunities in the kingdom have expanded and multiplied many, many times over," Saudi Investment Minister Khalid al-Falih said.

"As a result ... when Saudis and Americans join forces very good things happen, more often than not great things happen when those joint ventures happen," he said before Trump's arrival.

Trump, Saudi Crown Prince chat with Elon Musk ahead of lunch. – Reuters

Trump told the investment forum that relations with Saudi Arabia will be even stronger.

He was shown speaking with Riyadh’s sovereign wealth fund governor Yasir Al-Rumayyan, Aramco CEO Amin Nasser, and Falih as he toured a hall that showed off models for the kingdom’s flashy, multi-billion-dollar development projects.

Trump called the Saudi crown prince a friend and said they have a good relationship, according to a pool report from the Wall Street Journal, adding that Saudi investment would help create jobs in the US.

Musk thanks Saudi for approving Starlink for maritime and aviation. – Reuters

No visit to Israel, warning to Iran

Trump has not scheduled a stop in Israel, raising questions about where the close ally stands in Washington's priorities as Trump presses Israeli Prime Minister Benjamin Netanyahu to agree to a new ceasefire deal in the 19-month-old Gaza war.

Israel's military operations against Hamas in Gaza and Hezbollah in Lebanon, and its assassinations of the two Iran-allied groups' leaders, have at the same time given Trump more leverage by weakening Tehran and its regional allies.

Trump said it was his "fervent hope" that Saudi Arabia would soon normalise relations with Israel, following other Arab states that did so during his first 2017-2021 term.

"But you'll do it in your own time," he said.

Trump arrives in Riyadh, escorted by Saudi fighter jets. – Reuters

Netanyahu's opposition to the creation of a Palestinian state makes progress with the Saudis unlikely, sources told Reuters.

Trump on Tuesday called Iran "the most destructive force" in the Middle East and warned that the US will never allow it to obtain a nuclear weapon. He said he was willing to strike a new deal with the Islamic Republic but only if its leaders changed course.

"I want to make a deal with Iran," he said. "But if Iran's leadership rejects this olive branch... we will have no choice but to inflict massive maximum pressure."

Trump's Middle East envoy, Steve Witkoff, said last week he expected progress imminently on expanding accords brokered by Trump in his 2017-21 first term under which Arab states including the UAE, Bahrain and Morocco recognised Israel.

President Trump, right, listens as Israel's Prime Minister Benjamin Netanyahu speaks during a meeting in the Oval Office in April. – AP file

Deals take centre stage in Gulf

Following is an overview of major deals and announcements made on the sidelines of Trump's Gulf visit:

• Saudi Arabian DataVolt plans to invest $20 billion in AI data centres and energy infrastructure in the United States.
• Google, DataVolt, Oracle, Salesforce, AMD, and Uber are committing to invest $80 billion in technologies in both countries.
• Construction consulting firms Hill International, Jacobs, Parsons, and AECOM are building key infrastructure projects such as King Salman International Airport, King Salman Park, The Vault, Qiddiya City, and more, totalling $2 billion in US services exports.
• Additional major exports include GE Vernova's gas turbines and energy solutions totalling $14.2 billion and Boeing 737-8 passenger aircraft for AviLease totalling $4.8 billion.
• Healthcare firm Shamekh IV Solutions will be investing $5.8 billion, including a plant in Michigan to launch a high-capacity IV fluid facility.
• Hassana Investment Company and Franklin Templeton signed a memorandum of understanding valued at $150 million to explore a strategic partnership related to investments in Saudi private credit opportunities.
•  Saudi Aramco will sign memorandums of understanding with US liquefied natural gas producer NextDecade and utility firm Sempra, Aramco's chief executive said.
• US chip giant Nvidia and Saudi Arabia's sovereign wealth fund-owned AI startup Humain announced a partnership.
• US-based investment platform Burkhan World Investments said it signed memorandums of understanding with Saudi partners, totaling $15 billion in new investment commitments.