Is Saudi–Israel normalization worth it? Driving a hard bargain

On September 14, Israeli Prime Minister Benjamin Netanyahu departed for the US to attend the annual UN General Assembly meeting. The Israeli media also confirmed that he will meet with US President Joe Biden, Turkish President Recep Tayyip Erdogan, and President Volodymyr Zelenskyy.

The meeting with President Biden came amid strained relations between Washington and Tel Aviv due to the ongoing political instability and endless mass riots in Israel against the ultranationalist government.

Netanyahu and Biden have not met since Netanyahu took office nine months ago. In Israel, that has been perceived as criticism of the hardline government's effort to overhaul the judicial system and its settlement construction policies.

Moreover, the Biden administration does not hide its discontent and concerns regarding Netanyahu’s government’s harsh rhetoric against Palestinians and the Palestinian Authority (PA), which recently triggered violent protests of Palestinians and a brutal police crackdown.

Since its formation in 2022, Netanyahu's government has sought to undermine the PA in the West Bank while strengthening its rival, Hamas, in the Gaza Strip. It was a strategy to perpetuate the split between Gaza and the West Bank and rule out any suggestion of a newly strengthened Palestinian leadership in Ramallah as a potential peace partner for Israel.

Consequently, the situation with the PA and domestic violence turned into an onerous burden for Benjamin Netanyahu in his efforts to seek diplomatic normalization with Saudi Arabia, the leading regional actor in the Gulf, despite the full diplomatic support of the West. However, Israeli security forces’ frequent crackdowns on Palestinians and missile attacks on the Gaza Strip raised eyebrows in Riyadh and resulted in the stalemate of the Riyadh-Tel Aviv normalization process.

The current Washington – Riyadh confrontation also added fuel to the crisis, as on September 17, the Saudi government informed the Biden administration it is freezing US-brokered efforts to normalize relations with Israel because Prime Minister Benjamin Netanyahu’s hardline government is unwilling to make any concessions to the Palestinians.

Earlier, the Biden administration pushed Saudi Arabia for normalization ties with Israel in exchange for NATO-like security guarantees and helping the Gulf kingdom kick-start a civilian nuclear program. Although these talks did not involve the PA, they would include some concessions to them, such as an Israeli settlement freeze and a pledge from Israel to never annex the occupied West Bank.

Such poor prospects of normalization with Riyadh apparently pushed Netanyahu to seek reconciliation with the PA. Seemingly, official Tel Aviv apprehends that an empowered PA is a precondition for any photo-op with Crown Prince Mohammed bin Salman, not to mention for the Israeli leader’s prospects of a Nobel Peace Prize.

Nevertheless, Saudi Arabia officials have not entirely ruled out the prospect of a deal with Israel., stating that the latter is a "potential ally". In Riyadh's vision, the ideal peace and normalization with Israel will be possible after the full withdrawal of Israel from the occupied Arab territories, a "just settlement" of the Palestinian refugee problem, and the establishment of a Palestinian state with East Jerusalem as its capital.

Although the Israeli government seems enthusiastic about a diplomatic thaw with Saudi Arabia, it unlikely will withdraw from the territories populated by Palestinians in exchange for diplomatic relations with Riyadh. Indeed, full normalization between Israel and Saudi Arabia would be a dramatic accomplishment but not nearly as transformational as many may think.

In the wake of a war of words with the Biden administration and uneasy talks with Israel, Saudi Arabia bolsters a pragmatic approach to develop a more pragmatic foreign policy agenda. For example, Riyadh’s attempts to leave Yemen under a favourable ceasefire agreement with Houthis, its strong economic partnership with Russia and China, and its weaponization of the OPEC+ format perfectly suit the kingdom's interests.

Instead of concessions in security, Netanyahu’s government may promote economic measures to ease the PA's credit and cash flow crunch. Recently, Israel has approved the development of the Gaza Marine natural gas field off the Gaza coast in the Mediterranean Sea and is promoting the development of a Palestinian industrial zone in Tarqumiya, in the southern West Bank.

Benjamin Netanyahu is still stuck in a political quagmire as he desperately tries to rebuild his legacy, establish partnerships with Arab neighbours, address the criticism scale at home, and complete the normalization with Saudi Arabia. However, under current conditions, it is becoming increasingly clear that to reach a breakthrough with Riyadh, Netanyahu will have to make some weighty leadership decisions, some dangerous and some painful.