The Occupation Studies Normalisation Prospects with Saudi Arabia – Key Obstacles Revealed

Israel is renewing its push for normalisation with Saudi Arabia, in coordination with Washington, as part of a broader regional strategy. This initiative, however, was abruptly halted by the Al-Aqsa Flood operation on October 7, 2023. Now, with a ceasefire in Gaza and the progress of a prisoner exchange deal, the occupation is once again seeking to revive these discussions, according to a report by Channel 12, an Israeli news outlet.

According to Professor Eli Podeh, a Middle East and Islamic Studies scholar at the Hebrew University and a member of the Mitvim Institute, the normalisation process was on the verge of being finalised before October 7, but Hamas’ military operation derailed the agreement—a move that Podeh acknowledges successfully disrupted Israel’s normalisation efforts.

He argues that the war’s conclusion and the ongoing prisoner swap present a new opportunity to finalize this “nearly-baked” agreement. Podeh claims that Trump’s ambition for personal achievements and his desire for a Nobel Peace Prize could make Saudi normalisation an attractive goal for his administration.

Why Does Israel Seek Normalisation with Saudi Arabia?

According to the report, Israel views Saudi Arabia as a pivotal player—not only in the Gulf region but across the Arab and Islamic world. A deal with Riyadh could bolster the regional alliance against Iran, particularly as previous normalisation agreements survived despite the Gaza war.

Podeh outlines three main areas of impact if Saudi Arabia moves forward with normalisation:

1. Political Influence

• • Saudi Arabia has historically led regional and international diplomatic efforts.

• • In 2002, it launched the Arab Peace Initiative, calling for a two-state solution.

• • During the Gaza war, Riyadh hosted an Arab-Islamic summit, marking the first time both blocs convened together.

• • The kingdom co-leads an international coalition with the EU, comprising 90 nations, advocating for a two-state solution.

• • Riyadh hosted U.S., German, French, Italian, Spanish, and Turkish foreign ministers, alongside representatives from 11 Arab countries, to discuss regional crises, including Syria.

2. Economic Power

• • Saudi Arabia is the Middle East’s largest economy, surpassing Turkey’s GDP.

• • It holds the world’s largest oil reserves, giving it immediate leverage over global energy markets.

• • If global oil supplies are disrupted—whether due to sanctions on Iran or Russia, or natural disasters like Hurricane Katrina in the Gulf of Mexico—Saudi Arabia, alongside the UAE, could stabilise prices and prevent economic shocks.

• • Israel closely monitors how Saudi financial support has sustained Egypt and Jordan, with billions of dollars in aid over the past decade.

• • Saudi Arabia is expected to use its economic influence to shape regional politics, particularly in post-war Syria and Lebanon—where it aims to counter Hezbollah’s influence.

3. Religious and Strategic Leverage

• • Saudi Arabia commands immense religious authority, being home to Mecca and Medina.

• • Every year, over two million Muslims travel to perform Hajj, giving the kingdom significant influence in the Islamic world.

• • If Saudi Arabia normalises ties, it could open the door for Israel to access the larger Muslim market, including Indonesia and other key Islamic nations.

The Palestinian Question: A Major Obstacle

Despite Israel’s economic and political enthusiasm for normalisation, the Palestinian issue remains the primary roadblock.

Before the Gaza war, there were speculations that Saudi Arabia would settle for a mere symbolic concession on Palestine (“fig leaf diplomacy”). However, statements from high-ranking Saudi officials during the war suggest that Riyadh is now firmly demanding the establishment of a Palestinian state.

This stance was reinforced by U.S. Secretary of State Antony Blinken, who confirmed:

“The normalisation deal is ready for implementation, but it requires two conditions: the end of the Gaza war and a credible path to Palestinian statehood.”

While an end to the war may be feasible, the Palestinian statehood issue remains a major stumbling block—especially considering the Israeli public’s shifting attitudes post-war.

Israeli Public Opinion on Normalisation

A January 2025 survey conducted by the Institute for National Security Studies (INSS) found that:

• • Over 70% of Israelis support:

     

    • • Returning captives and ending the war.
    • • Normalising ties with Saudi Arabia.
    • • Separating from Palestinians and forming a regional security alliance against Iran.

This growing Israeli sentiment supports the idea of “strategic separation” from Palestinians—a vague term in diplomatic language, but one that raises doubts about whether it would satisfy Saudi Arabia’s demand for a real Palestinian state.

Conclusion: Will Normalisation Succeed?

While Israel and the U.S. are pushing to revive normalisation with Saudi Arabia, the Palestinian issue remains the fundamental roadblock.

Although Israel is eager to integrate into the region economically and strategically, Saudi Arabia’s diplomatic standing and leadership of the Islamic world prevent it from easily conceding on Palestine.

With the Gaza war reshaping geopolitical calculations, Saudi Arabia may demand stronger guarantees for Palestinian sovereignty, making any immediate normalisation highly uncertain.