Hundreds of people are nominated every year for Nobel prizes, with no guarantee of being picked.
The Norwegian Nobel Institute welcomes all proposed names, as long as they are sent in by January 31 for the year in question and are submitted by those eligible to nominate — which includes members of the country's parliament.
Trump has previously complained that he has not been considered more seriously for the peace prize, expressing bitterness that his Democratic predecessor Barack Obama was awarded the prestigious honor at the start of his first term in 2009.
"They gave it to Obama. He didn't even know what he got it for. He was there for about 15 seconds and he got the Nobel Prize," Trump said last year. "I probably will never get it."
Jared Kushner, Trump's son-in-law and White House advisor, said the president was "very, very honored to be nominated".
"All of America's allies feel much closer to America, and now they're becoming closer to each other and breaking barriers that people thought previously were not breakable. So it really is a very hopeful time in the Middle East," he added.
According to Tybring-Gjedde, President Donald Trump is more deserving than many past laureates for his role in breaking the impasse between Israel and an Arab regional power.
"Whether it's the 1978 Camp David accords or the 1993 Oslo accords, the Nobel Peace Prize has been given to the protagonists and this agreement is at least as revolutionary for the Middle East," he said.