Ghaith Al Ghaith, flydubai chief executive, was on the first flight. "Hopefully this will be the light that will shine and make the whole region stronger," he said. "We are a lucky generation in that we have been the generation that realised this potential and our leaders gave us this opportunity to build something very special.
"We worked very hard to create something extremely special that we are very happy to be able now to connect it with the state of Israel," he said.
The UAE in September signed a US-brokered deal to normalise relations with Israel, the first such agreement by an Arab state in the Gulf.
The two countries hope the move will bring rapid dividends with deals signed in agriculture, technology, education and telecoms. As Dubai enters its winter high season, it also hopes for an influx of tourists.
"The start of scheduled flights will contribute to economic development and create further opportunities for investment," Mr Al Ghaith said when the service was announced earlier this month.
The Dubai airline will fly the route twice daily, and Israeli airlines El Al and Israir are expected to launch their commercial services between the cities next month.
Etihad Airways, based in Abu Dhabi, has said it will begin flying to Tel Aviv in March.
The UAE is the third Arab country to normalise ties with Israel, following Egypt in 1979 and Jordan in 1994. Since the historic agreement, Bahrain and Sudan followed suit.
The UAE and Israel have already signed treaties on visa-free travel – although that has yet to come into force – along with accords on investment protection, science and technology. The agreements end a long-standing Arab consensus that there should be no normalisation with Israel until it reaches a comprehensive peace deal with the Palestinians.
The UAE has stated that ties with Israel do not end its long-standing support for the Palestinians or their aspiration for an independent state with East Jerusalem as its capital. The UAE hopes that by being involved in the discussion and changing the equation, movement can be made on the long-stalled peace talks.
Saudi Arabia has not formalised ties with Israel, saying that any deal would still be contingent on a lasting and just settlement for Palestinians. But the kingdom has given the green light to overflights from Israel to the Gulf, significantly cutting travel time and flight costs.
After the UAE deal was announced by US President Donald Trump in August, El Al flew a delegation of US and Israeli officials – led by Mr Trump's son-in-law Jared Kushner – to Abu Dhabi in the first direct service between the two countries.
That was followed by an official visit by a UAE delegation to Tel Aviv as well as a string of charter flights carrying business groups.