By Maria Abi-Habib and Ismaeel Naar
A year ago, Saudi Arabia was preparing to recognize Israel in a normalization deal that would have fundamentally reshaped the Middle East and further isolated Iran and its allies while barely lifting a finger to advance Palestinian statehood.
Now, that deal is further away than ever, even after the killing of Hamas leader Yahya Sinwar, which has been widely seized upon as a potential opening for a peace deal. Instead, Saudi Arabia is warming relations with its traditional archenemy, Iran, while insisting that any diplomatic pact now hinges on Israel’s acceptance of a Palestinian state, a remarkable turnaround for the kingdom.
A diplomatic detente is underway in the Middle East, but not the one envisioned by Israeli Prime Minister Benjamin Netanyahu, who continues to say that his administration can clinch a deal with Saudi Arabia. This month, the foreign ministers of the Persian Gulf states met for the first time as a group with their Iranian counterpart. It is a shaky, early stage rapprochement that will only chip away at centuries of sectarian antagonisms, but it represents a sharp shift in a region where the rivalry between Saudi Arabia and Iran has drenched the region in bloodshed for decades.
Iran’s outreach continued after that, with the country’s foreign minister, Abbas Araghchi, visiting Saudi Arabia before heading to other countries in the region, including Iraq and Oman, in an effort to ease tensions. He also visited Jordan before traveling to Egypt and Turkey. The visit to Egypt was the first by an Iranian foreign minister in 12 years, according to Iranian news media.
“In the region, we now have a common grievance about the threat of the war spreading, and the wars in Gaza and Lebanon and the displaced people,” Araghchi said Friday when he landed in Istanbul.
While Netanyahu continues to reject the creation of a Palestinian state, Saudi officials have taken to newspapers and public speeches to put a two-state solution on the negotiating table. That, the kingdom has said, is the only way at this point for Israel to win favor with Saudi Arabia, largely seen as the leader of the Arab world.
What changed? Images started streaming out of the Gaza Strip of children buried alive under rubble, mothers grieving over their dead babies and Palestinians starving because Israel had blocked aid from entering the territory — all of which made it impossible for the Saudi leadership to ignore the issue of Palestinian statehood.
“What Gaza has done is set back any Israeli integration into the region,” said Ali Shihabi, a Saudi businessperson who is close to the monarchy and sits on the advisory board of Neom, a futuristic city that is the pet project of Crown Prince Mohammed bin Salman, the kingdom’s future ruler. “Saudi Arabia sees that any association with Israel has become more toxic since Gaza, unless the Israelis change their spots and show a real commitment to a Palestinian state, which they have refused to do.”
For now, Saudi Arabia and its Gulf partners remain skeptical about the sincerity of Iran’s diplomatic overtures. While two of Iran’s proxies, Hamas and Hezbollah, have been hammered by Israel, Iran still arms and supports its third ally, the Houthis in Yemen, which have attacked Saudi Arabia.
But “as long as the Iranians are reaching a hand out to Riyadh, the Saudi leadership will take it,” said Shihabi, adding that, if Iran is serious, “that would be a true realignment of the Mideast.”
Saudi Arabia and Iran have long jockeyed for regional dominance, a rivalry shaped by the competing branches of Islam each country embraces.
The war in Gaza has been raging for over a year, starting after Hamas launched a bloody attack on Oct. 7, 2023, killing some 1,200 Israelis and kidnapping over 200 more. That prompted Israel to launch an invasion of Gaza that has been criticized for its indiscriminate bombing and catastrophic death toll: over 40,000 dead, many of them civilians.
In the months before Oct. 7, Saudi Arabia was planning an agreement with Israel that would have given Riyadh an expanded defense pact with the United States and support for a civilian nuclear program in exchange for normalizing ties. While some other Gulf countries opened diplomatic relations with Israel in 2020 in a deal known as the Abraham Accords, they did not use their leverage to push Israel to create and recognize a Palestinian state.
While Riyadh has long been a vociferous supporter of a two-state solution, that goal became less of a foreign policy priority in recent years, as the crown prince solidified his power and shaped the nation’s regional and domestic policies. In last year’s talks to normalize ties with Israel, a Palestinian state was never raised as a condition. Instead, Saudi Arabia demanded that Israel allow for the Palestinian Authority — which governs the West Bank — to expand its territorial control and power, according to Shihabi and Arab diplomats with knowledge of the talks.
But the situation in Gaza has upended that ambivalence.
In his first public comments advocating for a Palestinian state, Crown Prince Mohammed was unequivocal about Saudi Arabia’s new demands.
“The kingdom will not cease its tireless efforts to establish an independent Palestinian state with east Jerusalem as its capital, and we affirm that the kingdom will not establish diplomatic relations with Israel without one,” the crown prince said Sept. 18 to his senior advisory council, in a speech akin to the akin to the U.S. State of the Union address.
The Abraham Accords have been criticized for not delivering the peace to the region promised by former President Donald Trump, whose administration brokered the deal. None of the Arab states that signed on have fought a war with Israel in decades, and the deal did not include Iran and Syria, which are in active conflict with Israel.
The historic meeting between Iran and the Gulf countries this month came a day after Tehran launched 180 ballistic missiles at Israel. The attack was revenge for last month’s killing of Hassan Nasrallah, the leader of Hezbollah, and the assassination of Hamas political chief Ismail Haniyeh earlier this year, key Iranian allies.
Observers wonder if Iran is now more eager to thaw relations with the Gulf because of Israeli operations that have killed most of Hezbollah’s top leadership in recent weeks. The Lebanese militia has long been Iran’s most powerful Arab ally and proxy, long feared by Israel and the linchpin in Tehran’s efforts to project its power across the Middle East. It also provided a bulwark against Israel for Iran. Without Hezbollah, Iran is severely weakened.
The war in Gaza has also forced countries that have signed on to the Abraham Accords to start advocating for Palestinian statehood, possibly because they worry about public opinion at home.
While the United Arab Emirates, the Gulf’s second-most powerful player, has maintained links to Israel over the last year, the relationship has come under increasing stress.
“The United Arab Emirates is not ready to support the day after the war in Gaza without the establishment of a Palestinian state,” Emirati Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan, said last month, referring to Israel’s demands that the UAE shoulder the burden of rebuilding Gaza after the war ends.
While Netanyahu continues to claim that a monumental deal is in the works with Riyadh, Saudi officials have pushed back, highlighting the widening divide between their nations.
“The Abraham Accords were cosmetic; there was nothing substantive about them when it comes to a real, enduring regional peace agreement. Many of the states that signed on did so because they see Israel as a path to influence in Washington,” Shihabi said.
“But now we see that the U.S. has no power or influence over Israel — to a humiliating degree,” he added, “and that the Israelis have no intention to create a Palestinian state.”
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