No Saudi bailout for Netanyahu

Ahmed Mustafa , Wednesday 16 Aug 2023

Reports of an imminent Saudi-Israeli peace deal promoted by Washington are probably premature

No Saudi bailout for Netanyahu


For nearly an hour after the Wall Street Journal published its first report on a US-mediated peace deal between Saudi Arabia and Israel, the Tel Aviv stock exchange shot up and the value of the shekel, the Israeli currency, soared. This was quickly cut short once the White House played down the breakthrough and the WSJ amended its report, but the hype underscored Israeli enthusiasm to normalise relations with Riyadh.

The initial WSJ report spoke of a breakthrough, quoting unnamed American officials saying that details of a deal are almost finalised. Later, it amended the report to “Saudis agree with US on path to normalise kingdom’s ties with Israel.” The new version highlighted “cautious optimism that, in the next nine to twelve months, they can hammer out the finer details of what would be the most momentous Middle East peace deal in a generation”.

All parties are interested in achieving what Israeli Prime Minister Benjamin Netanyahu has described as the Jewel of the Crown in his country’s pursuit of normalisation with Arab countries. The de-facto ruler of Saudi Arabia, Crown Prince Mohamed bin Salman, was not keen on joining an earlier drive for normalisation when the United Arab Emirates, Bahrain and Morocco signed the so-called Abraham Accords in 2020.

Saudi officials and commentators have spoken consistently of a comprehensive deal in the light of the Biden administration’s need to achieve a major foreign policy victory in the Middle East. “Biden considers achieving a peace agreement between Saudi Arabia and Israel a very important matter that can help him get re-elected and also show he ‘did something’ after his policy failures in the Middle East. Such a peace deal would be a political lifesaver for him and the Democratic Party. The Americans have been asking the Israelis to meet Saudi demands, but they were later reluctant to accept some Saudi provisions,” the Saudi commentator Abdul-Aziz AlKhames told Al-Ahram Weekly.

The main obstacle to the Saudi-Israeli peace path is the Palestinian cause. Riyadh wants Israeli concessions that pave the way to the creation of a Palestinian state. That is consistent with the 2002 Arab peace initiative the Saudis offered based on a two-state solution. The Israeli far-right government will make no concession to the Palestinians, even though the Americans seem to be accepting the logic of Saudi demands. According to reports in the Israeli media, senior Israeli officials have been saying that such concessions will be minimal, such as a promise to avoid officially annexing the West Bank and a series of economic gestures Netanyahu’s far-right coalition can agree on.

Last week, in an interview with Bloomberg, Netanyahu dismissed the notion that the Palestinian issue will significantly hinder efforts to normalise ties with the Saudis. “It’s sort of a checkbox… You have to check it to say you’re doing it. Is that what’s being said in corridors? Is that what’s being said in discreet negotiations? The answer is a lot less than you think.”

Yet there is some optimism that Israel might give in to Saudi demands concerning the Palestinian side of the deal. Tel Aviv acknowledges that Riyadh would not go for a deal that is only bilateral, but must present Saudi Arabia as a leader in the region. As Alkhames says, “now, it seems that the Israelis are ready for some concessions. The Saudis need a good deal, and that can’t happen without a significant Palestinian issue component, even though Riyadh’s position is for peace anyway.” He adds: “The problem might be the absence of a unified Palestinian leadership capable of negotiating into a serious peace deal with the Israelis and assuring them of the security issues Tel Aviv sees as the main concern.”

This is not the only obstacle to progress on a Saudi-Israeli deal. What Saudi Arabia is demanding from the US requires congressional approval by two thirds of the House of Representatives. This is not guaranteed under the current Democratic administration as Republicans control the majority in the House. Saudi demands centre on a mutual defence pact with the US, a supply of American weapons that no Middle Eastern country except Israel has, and American support for a civilian nuclear programme.

The last demand is also facing opposition in Israel and creating friction with Washington. Aside from the lack of alignment regarding the Palestinian component, Israeli officials worry that US support for a civilian nuclear programme in Saudi Arabia could pave the way to Riyadh developing nuclear weapons, which Bin Salman has said he would do in response to an Iranian nuclear weapons programme.

In return for accepting Saudi demands, the Biden administration is seeking “assurances from Saudi Arabia that it won’t allow China to build military bases in the kingdom — an issue that has become a sore point between the Biden administration and UAE. Negotiators could also seek limitations on Saudi Arabia using technology developed by China’s Huawei and assurances that Riyadh will use US dollars, not Chinese currency, to price oil sales. The US is also expected to look for ways to end the feud over oil prices driven by Saudi Arabia’s repeated production cuts,” as the WSJ reported.

It is not clear that Riyadh is willing to give up its independent foreign policy of broadening coalitions beyond a “special relationship” with Washington. Bin Salman is not willing to hand out free favours. He is well aware that Biden needs the deal to shore up his election chances next year. Meanwhile the ailing Netanyahu government is in need of any achievement to alleviate internal pressure and continuous protests against its policies. Now is as good a time as any for Riyadh to secure a good bargain. That is why Alkhames concludes: “There are serious efforts and some progress, but a Saudi-Israeli deal might still be some distance down the road.” The end of the road seems to be in Riyadh, but whether it’s ready to help an election-focused Biden or an ailing Netanyahu remains to be seen.

* A version of this article appears in print in the 17 August, 2023 edition of Al-Ahram Weekly

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