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"The logic behind them is unacceptable and reflects a complete detachment from reality," the regional bloc's chief, Ahmed Aboul Gheit, said in a statement, adding that ideas as the one aired by Netanyahu during a recent media interview "are nothing more than mere fantasies or illusions".

Netanyahu had said in an interview on Thursday that: "The Saudis can create a Palestinian state in Saudi Arabia; they have a lot of land over there." 

Netanyahu's remarks came in response to a question about Saudi Arabia setting the establishment of a Palestinian state as a precondition for normalization with Israel.

The Israeli PM made these remarks during his visit to Washington, DC, where he appeared alongside US President Donald Trump, who sparked outrage on Tuesday when he suggested that the US would "take over" Gaza, displace its Palestinian population, and turn the territory into the "Riviera of the Middle East."

The proposal has drawn widespread condemnation, with critics accusing it of attempting to "ethnically cleanse" the Palestinian population and erase their presence in Gaza.

Netanyahu also claimed that the normalization of ties between Israel and Saudi Arabia was "imminent." This was quickly followed by a Saudi press statement affirming that Saudi Arabia's stance on Palestinian statehood "remains firm and unwavering."

"His Royal Highness emphasized that Saudi Arabia will continue its relentless efforts to establish an independent Palestinian state with East Jerusalem as its capital and will not establish diplomatic relations with Israel without that," the statement read.

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