"When Abram was ninety-nine years old, the LORD appeared to Abram and said to him, 'I am Almighty God; walk before Me and be blameless. And I will make My covenant between Me and you, and will multiply you exceedingly.' Then Abram fell on his face, and God talked with him, saying: 'As for Me, behold, My covenant is with you, and you shall be a father of many nations. No longer shall your name be called Abram, but your name shall be Abraham; for I have made you a father of many nations. I will make you exceedingly fruitful; and I will make nations of you, and kings shall come from you" (Gen. 17:1-6).
Abram is 99 years old and Ishmael is 13 at this time. God announces to Abram that He is about to make the covenant operative. In other words, it was time for the promised son to come (and Ishmael wasn't it)! Although he is an old man, Abram falls on his face, out of reverence for Almighty God, and listens. God here changed Abram's name to Abraham, meaning "father of a multitude". He was already rich, but he was about to become exceedingly fruitful as the father of many nations and kings.
"Also I give to you and your descendants after you the land in which you are a stranger, all the land of Canaan, as an everlasting possession; and I will be their God" (Gen. 17:8). This covenant would be "everlasting" in the sense that it would last for a long duration of unknown length. The Hebrew word olam does not require the understanding here of "forever" as we use the word "everlasting" today in English. The descendants of Abraham would have Canaan as their possession for a long time, though not literally forever due to their infidelity.
"This is My covenant which you shall keep, between Me and you and your descendants after you: Every male child among you shall be circumcised; and you shall be circumcised in the flesh of your foreskins, and it shall be a sign of the covenant between Me and you" (Gen. 17:10,11). The covenant had been established over a decade earlier, but now there is something for Abraham to do. He needed to be circumcised (as well as all the males in his household, both sons and servants). Circumcision is not the covenant, but it is a sign of it. One was born into the covenant relationship, and circumcision was a continual reminder of their obligations under it. Such was to be implemented on the eighth day of the child's life. A Hebrew male could not be faithful to God without it!
"And the uncircumcised male child, who is not circumcised in the flesh of his foreskin, that person shall be cut off from his people; he has broken My covenant" (Gen. 17:14). Although there is sometimes ambiguity in the precise meaning of the phrase "cut off" (as used in the Old Testament), the meaning here seems to refer to death. A Hebrew male who would not submit to circumcision should be executed.
"Then God said to Abraham, 'As for Sarai your wife, you shall not call her name Sarai, but Sarah shall be her name. And I will bless her and also give you a son by her; then I will bless her, and she shall be a mother of nations; kings of peoples shall be from her'" (Gen. 17:15,16). His wife also received a new name--Sarah. As Abraham would be blessed, so would Sarah. She, at 90 years of age, would become a great mother of nations!
"Then Abraham fell on his face and laughed, and said in his heart, 'Shall a child be born to a man who is one hundred years old? And shall Sarah, who is ninety years old, bear a child?' And Abraham said to God, 'Oh, that Ishmael might live before You!'" (Gen. 17:17,18). Abraham rejoiced mightily at this news. He believes God and expresses his amazement verbally. His laughter is that of joy and excitement, not doubt (Sarah's laughter in 18:12 is just the opposite). Abraham, while receiving such a wonderful blessing, is mindful of his son, Ishmael. He desires God to bless him, too. Although Ishmael would not be the promised son, God would make him fruitful also.
"That very same day Abraham was circumcised, and his son Ishmael; and all the men of his house, born in the house or bought with money from a foreigner, were circumcised with him" (Gen. 17:26,27). Abraham wastes no time obeying God. One can only imagine the pain caused by such a procedure, particularly for grown men (as opposed to infants). But, Abraham--a great man of faith--is gladly willing to pay any price to serve His God (e.g., Gen. 22).