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Did God not know that Abraham feared Him?

Genesis 22:12

Aside from Abraham's statement to Abimelech, "Surely the fear of God is not in this place" (Gen. 20:11), the first use of the expression "to fear God" in Genesis comes at the climax of the story of the binding of Isaac (Gen. 22:12). God says to Abraham, "For now I know that you fear God, since you have not withheld your son, your only son, from Me." This blessing on Abraham raises two questions: what is meant by "fearing God," and why does God say "now I know"?

In Hebrew Scripture there are two verbs in frequent use that mean "fear," yara' and pahad. There are times when these words are used as synonyms describing fright, terror, and horror. But the word pahad typically describes the terror that will arise with the exposing of sin on the Day of Judgment. On the other hand, 'yara' is used to describe the proper response to God, not as fright but as godly fear, reverence, awe, and a readiness to worship Him (Prov. 1:7; 9:10).

But why does God say "now I know that you fear God"? There are times in the OT where God is seen "to come down to" or "to enter into" the human situation. As God is near Abraham, he has entered, as it were, the space-time arena and He experiences with Abraham that Abraham was feeling and doing. The "now I know" is not a discovery of something otherwise unknown on the part of a god with limited knowledge, but a touching partnership of omniscient deity with His chosen servant! What a picture of grace!