Genesis 17:3-8

Abraham fell face down before the Lord. When we humble ourselves before the Lord He will speak to us. He has just told Abraham what Abraham was to do, ie walk faithfully and be blameless, now He says what He will do. A covenant has two parties, and both have obligations. Abraham would be the father of many nations, remember that at this point he was not even the father of one person (excluding Ishmael). Note that God says He has already made Abraham a father of many nations. God declares what will be, and then makes it happen (Romans 4:17). So he gives Abraham a new name, though it is only a small change in terms of letters. Abram means "exalted father", and Abraham means "father of many". For a long time his name must have seemed a mockery for Abram, for he was getting nowhere in the fatherhood stakes. God is not restricted by the past, nor how things seem to be. Through faith all things are possible. We should apply this to ourselves.

This would be an everlasting covenant, and applied not just to Abraham. God repeats it to Isaac and Jacob, and Paul says in Galatian 3:29 that we inherit the promises. The covenant involved both the people and the land. He would have many descendants and they would have somewhere to live. Likewise Jesus came to give us life, and life to the full (John 10:10).