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Saudi-Israel normalization emerges as leverage for post-war Gaza

Dormant discussions of a two-state solution are back on the US and regional agenda as part of Israel-Saudi normalization talks shelved after Oct. 7.
US Secretary of State Antony Blinken's meets with Saudi Crown Prince Mohammed bin Salman at al-Ula in northwestern Saudi Arabia on January 8, 2024, during his week-long trip aimed at calming tensions across the Middle East.

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WASHINGTON — As it clashes with Israel over a plan for Gaza's day after, the Biden administration has suggested a historic peace accord between Saudi Arabia and Israel could be leveraged to secure a pathway for Palestinian statehood. 

Preliminary talks are underway to pick up where negotiations left off before Oct. 7, when the two rivals were inching closer to an agreement that would see Saudi Arabia formally recognize Israel’s existence in return for US security guarantees, help developing a civilian nuclear program and modest concessions for the Palestinians.  

Secretary of State Antony Blinken, who on Thursday concluded his fourth trip to the Middle East since the Gaza war erupted, said eventual rapprochement with Israel was among the topics he discussed during his meeting this week with Saudi Crown Prince Mohammed bin Salman. US national security adviser Jake Sullivan also raised normalization during meetings in Israel and the West Bank last month, sources in both capitals said. 

Speaking to reporters in the Saudi oasis town of Al Ula on Monday, Blinken said the oil-rich Gulf kingdom still has a “clear interest” in eventual relations with Israel. 

“It would require the conflict to end in Gaza, and it would clearly require there be a practical pathway to a Palestinian state,” the top US diplomat said. "But the interest is there. It's real and it could be transformative."

The following day, Prince Khalid bin Bandar, the Saudi ambassador to the UK, told the BBC the kingdom is “absolutely” still interested in ties with Israel as long as that reconciliation doesn’t come at a cost to the Palestinian people. 

Long-sought normalization between the two regional powers has the potential to reshape the Middle East, paving the way for other Arab countries to recognize the Jewish state. But negotiators face the same hurdles as they did before Oct. 7: a right-wing Israeli government opposed to a Palestinian state and a US Congress that would need to greenlight any defense treaty with Saudi Arabia. 

On top of that, Arab public opinion has turned further against normalization with Israel. A recent poll conducted by the Washington Institute for Near East Policy found that 96% of Saudi citizens believe that Arab countries should immediately sever contact with Israel to protest its military campaign in Gaza, which the Health Ministry in the Hamas-run territory says has killed over 23,000 people in three months.

Analysts say the price of normalization has shot up amid the Arab backlash. While the signatories of the Trump administration-brokered Abraham Accords — the United Arab Emirates, Bahrain, Morocco and Sudan — did not make Palestinian statehood a precondition of rapprochement with Israel, Saudi Arabia is expected to demand substantive concessions that would preserve the prospect of an independent Palestinian state. 

"The Saudis see an opportunity to reclaim leadership both within the Arab world, the broader Muslim world and to some extent on the Palestinian streets,” said Richard Goldberg, a senior adviser at the Foundation for Defense of Democracies. 

“There's a slew of potential concessions on the table, and big ticket items for the future of the Palestinians in both the West Bank and Gaza,” Goldberg said. 

Prior to Oct. 7, the Palestinian issue did not feature as prominently in normalization talks. The Saudi crown prince did not demand statehood when he told a television interviewer in September that he merely hoped a deal would “ease the life of the Palestinians."

At the time, the Palestinians were said to be asking for a restoration of Saudi financial aid, a reopening of the US consulate in Jerusalem and the Palestine Liberation Organization’s office in Washington and US support for Palestine’s full membership at the United Nations. 

“The demands that the Palestinians were making were pretty modest,” said Ghaith Al-Omari, a senior fellow at the Washington Institute for Near East Policy and adviser to the Palestinian negotiating team from 1999-2006. He told Al-Monitor, “Now they feel that there's an opportunity to get a big political win through the Saudi-Israeli track.”

Saudi normalization talks could be used to try to get Israel on board with the US plan for a “revitalized” Palestinian Authority to administer the coastal enclave of 2.3 million when the war is over. The PA, which was violently expelled by Hamas from Gaza in 2007, oversees parts of the West Bank, where it is widely seen as corrupt and ineffectual.  

The Biden administration believes the PA is the most viable option to ultimately run Gaza, and has pressed its leadership to implement reforms. That plan has faced resistance in Israel, with Prime Minister Benjamin Netanyahu vowing that "Hamastan" won’t be replaced by "Fatahstan," a reference to the secular political party Fatah that dominates the PA. 

One informed source told Al-Monitor that US and Saudi negotiators could also seek an expansion of the PA’s ability to operate in the West Bank, limits on settlement activity and a “clear statement of intent” from Israel with some territorial definitions of a future Palestinian state. Another source with knowledge of the Palestinian leadership's thinking said the Saudis would demand Israel take “immediate steps” to lay the groundwork for a two-state solution. 

A landmark diplomatic pact with Saudi Arabia, however, faces long odds under the current hard-line Israeli government, with Netanyahu and other right-wing ministers loudly opposing Palestinian ambitions for statehood. 

“The US regional strategy and the strategy for the morning after in Gaza both are presently stuck in Jerusalem,” said Nimrod Novik, a fellow at the Israel Policy Forum and former adviser to then-Israeli Prime Minister Shimon Peres. 

Netanyahu is operating in political survival mode, with his popularity after Oct. 7 having plummeted. Recent polling from the Israel Democracy Institute found just 15% of Israelis want him to keep his job when the war is over. 

Netanyahu cannot afford defections over the Palestinian issue from coalition partners, who together compose a fragile majority in the Knesset. Israel’s far-right National Security Minister Itamar Ben-Gvir, who leads the Jewish Power Party, has already threatened to jump ship if the Israeli military offensive in Gaza doesn’t “continue at full strength.”

Territorial or economic concessions for the Palestinians would also be a hard sell to an Israeli public still reeling from the surprise attack that saw Hamas militants kill 1,200 people and take some 240 others hostage during attacks just three months ago. 

“The Israeli media is flooded 24/7 with stories about the horrific events, stories about each of the victims,” Novik told Al-Monitor. “To talk to Israelis about peace with the Palestinians now is totally detached from reality.” 

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