Saudi-Israeli Relations: Progress, Risks and Opportunities

The State of Israel, established in 1948, has never been officially recognized by Saudi Arabia, although Saudi policy toward Israel has been gradually converted from erstwhile hostility to normalization in all but name. In recent years, Saudi Arabia and Israel have exchanged high-level diplomatic contacts and visits. Saudi citizens visit Israel on their Saudi passports by special arrangement. Israeli businesspeople and civil society leaders carrying Israeli passports visit Saudi Arabia by special invitation. Saudi airspace is open to Israeli commercial flights. Israeli athletes can now compete in Saudi Arabia. The two states engage in technological, economic, military, and security cooperation. Saudi Arabia is invested in the Israeli economy through the private equity firm of President Donald Trump’s son-in-law, Jared Kushner. The need to conduct transactions through shell companies outside of Israel is one of the few remaining vestiges of the unconventional nature of the bilateral relationship. 

Since 1981, Saudi Arabia’s offer of official recognition, defined as the exchange of ambassadors, has been held out as an incentive for Israel’s complete withdrawal to the 1967 borders, a just solution to the refugee problem, and the creation of a Palestinian state in the West Bank and the Gaza Strip with East Jerusalem as its capital. Nonetheless, Saudi Arabia has given its blessing to the Abraham Accords, which formalized ties between Israel and two Gulf Arab states, Bahrain, and the United Arab Emirates (UAE), in September 2020. The Abraham Accords, which did not furnish a settlement in the Israeli-Palestinian arena, elicited harsh rebukes from the Palestinian leadership.[1] Israel seeks to normalize ties with Saudi Arabia, just as it normalized ties with Bahrain and the UAE, while maintaining the status quo as far as the Palestinians are concerned. The endgame for Mohammad bin Salman, the Crown Prince, and the de-facto ruler of Saudi Arabia, is less apparent. When it comes to the question of making the relationship official, Bin Salman appears to be holding out for a rainy day. But the old axiom about how Saudi recognition of Israel is contingent upon certain Israeli concessions to the Palestinians seems to be unreliable. Leaders in Jerusalem, Ramallah, and Gaza, all doubt the sincerity of Bin Salman’s commitment to the Palestinian cause. Moreover, all Arab-Israeli peace treaties, including the most recent ones, have prioritized narrow state and regime interests over pan-Arab goals. 

The primary strategic driver of normalization has been the rise of Iran in the regional power equation. Israel views the Islamic Republic of Iran as an existential threat, while Saudi Arabia views Iran as a revisionist state whose goal of regional dominance would come at the expense of Saudi Arabia; moreover, Iran’s methods of achieving its goals undermine Saudi Arabia’s position in the region as well as its domestic security. Open collaboration between Israel and Saudi Arabia dates from June 2015, when former Saudi general bin Majed bin Anwar Eshki and former Israeli ambassador Dore Gold, shared a stage at the Council on Foreign Relations in Washington to discuss their countries' shared concerns about Iran.[2] The impetus was the impending Joint Comprehensive Plan of Action (JCPOA), commonly known as the “Iran nuclear deal,” concluded between Iran and the P5+1 (the U.S., U.K., France, China, Russia and Germany) just over a month later. 

The Iran nuclear deal was interpreted in Jerusalem and Riyadh as a capitulation to Iran and an abnegation of Washington’s commitment to the security of the region and its regional allies. They rightly predicted that the lifting of sanctions and the infusion of cash to Iran would benefit the Iranian Revolutionary Guard and strengthen Iran’s extraterritorial operations in Sunni Arab states, particularly in states that were fractured by civil wars, such as Syria and Yemen. Today, Israel faces a much more formidable threat on its northern border owing to the enlarged Iranian military presence in Syria and the expansion of Hizballah’s capabilities in south Lebanon. Mohammad bin Salman, the architect of the Saudi military intervention in Yemen which began in 2015, likely feels that he has been robbed of a victory in Yemen, owing to the infusion of Iranian weapons and technical expertise to the Houthis. Iran’s penetration of weak Arab states bordering Israel and Saudi Arabia and its demonstrated willingness to engage both in proxy wars have helped forge some common ground between the unlikely allies.

Saudi engagement with Israel has been one component of a complex strategy designed to address domestic and external threats as well as concerns for regime survival. Mohammad bin Salman is heir to the throne held by his octogenarian father, King Salman, though he is widely regarded as the de-facto ruler of Saudi Arabia. His accession to the throne will mark the first transition from rule by the sons of Ibn Saud, the Kingdom’s founder, to a grandson. Saudi custom did not require that the throne should pass to Bin Salman. In Saudi custom, any male from among the progeny of the Kingdom’s founder is eligible to be the successor. Traditionally, familial consultations and consensus-building played a vital role in the selection. But Mohammad bin Salman’s rise to power and his first few years in power have marked a dramatic shift away from the traditional consultation and consensus building within the Al Saud family, and a shift toward a one-man style of rule. As a result, Saudi policies today are strongly skewed toward Bin Salman’s need to consolidate and strengthen his grip on power and lay a strong enough foundation for a 50-year reign. 

Modernization is vital to Bin Salman’s long-term plans. In light of that, he has moved decisively to tame the powerful Wahhabi religious establishment, to pave the way for the new directions he wants to pursue in domestic and foreign policy. One of those directions is the incorporation of women into the labor force. Allowing them to drive was a step in that direction. Another priority is planning for the world’s future transition away from fossil fuels. How will the Saudi regime cope when it can no longer buy domestic stability with subsidies and generous social welfare programs? Bin Salman’s response is Vision 2030, an ambitious plan to develop the private sector, and foster a self-sufficient economy that will support the standard of living that citizens have become accustomed to. Promoting territorial nationalism in a region where it has always been scarce is another long-term initiative. 

Preparations for formal ties with Israel are also underway. One indication is the appointment of a cleric, known for having visited Auschwitz and for promoting interfaith dialogue, to an influential role as secretary of the Muslim World League, headquartered in Jeddah. The cleric’s name is Muhammad bin Abd al-Karim al-Issa.[3] Another indication of the slow preparation for formal peace is the scrubbing of some anti-Semitic content from national school textbooks.[4] Mohammad bin Salman’s many public statements have also been used to signal his intent. He reportedly told a group of Jewish leaders in Washington D.C. that the Palestinians were not a top priority for Saudi Arabia and that his patience with them was running out. He said the Palestinians should either use one of the many proposals to reach a deal, or “shut up and stop complaining.”[5] Most recently he described Israel as a “potential ally.”[6] These kinds of statements can serve multiple purposes: They can serve as a trial balloon, as a means of gauging the reaction of Saudi citizens; as a sermon about the moderate and pro-American attributes of Saudi foreign policy; as a warning to Iran about the pain that Saudi Arabia could inflict if the Islamic Republic doesn’t modify its behavior; and as a carrot, to remind Israel of the rewards it stands to gain by making certain concessions. 

Israel has always welcomed, indeed sought out, the establishment of peace treaties with Arab and Muslims states. Historically, Israel has viewed Saudi Arabia as a grave threat. This was manifested in the way that Israel went to great lengths in 1981 to try to block the sale of American military surveillance planes to the Kingdom. Until recently, Israel viewed Saudi Arabia as a state-sponsor of terror owing to its financial support for Palestinian groups that carried out terror attacks in Israel. A key turning point in how Israel viewed Saudi Arabia was the 2006 Israel-Hizballah war. As 4,000 rockets rained down on northern Israel, Jerusalem braced for the usual Arab statements expressing solidarity with the Arab resistance movement and commitment to the cause of liberating all of Palestine. When a Saudi statement accused Hizballah of threatening Arab interests by using Iranian-supplied rockets to engage in “rash adventures,”[7]Jerusalem recognized that Saudi Arabia shared its perception of Iran as the main threat in the region and began to explore the idea that perhaps there were grounds for collaboration. Israel’s strategic assessments identified Saudi Arabia, the UAE and Bahrain as particularly vulnerable to Iran’s expansionist goals and methods of achieving them. Fresh outreach initiatives were launched by officials, civil society entrepreneurs and influencers to build social, economic, academic, religious, strategic, and political bridges with the Gulf Arab states. Among the enticements that bore the most fruit, was the offer of Israeli-made intelligence technologies and cyber products. 

A key catalyst for normalization has been the intersection between Israel’s leadership in military technology, cyber security, and counter-insurgency techniques and the evolving threats to the Gulf Arab regimes, both from within and from without. The succession of uprisings and rebellions in 2010-2011 collectively referred to as the “Arab Spring,” gave the Gulf regimes a wake-up call. Seeing long-established Arab regimes toppled in quick succession by the angry masses horrified the Gulf Arab rulers who worried that the wave of protests would wash up on their shores. Tehran advertised its eagerness for the “Islamic awakening” to topple the rulers of the Gulf Arab states just as it had toppled Ben ‘Ali in Tunisia and Hosni Mubarak in Egypt.[8] Moreover, Gulf rulers viewed the 2011 Arab Spring protests in Manama as part of Iran’s ongoing efforts to export its Shi‘i revolution to an archipelago inhabited mostly by Shi‘a. Gulf rulers feared that the success of the Egyptian Muslim Brothers in the aftermath of Mubarak’s ouster encouraged a formula that could destabilize their own rule. The dreaded formula was the combination of Islam and democracy. Just as the rulers in Riyadh, Abu Dhabi, Dubai, and Manama were looking to reinforce their coup-proofing strategies, Israel offered some tried and tested counterinsurgency and spyware tools. 

Israel looked for opportunities to build trust and demonstrate its usefulness to the Gulf states that were on the frontlines against Iran. For example, when Saudi ARAMCO became the victim of an Iranian-backed cyber-attack in 2012, Saudi Arabia accepted an offer to allow Israeli cybersecurity firms to come in and repair the breech.[9] Eyeing this as an opening and a window of opportunity, the Israeli government and defense establishment quietly granted permission for the sale of Israeli-made cyber security and surveillance technologies to Gulf Arab states. Firms that were greenlighted to sell technologies including, Quadream, Candiru, Paragon and NSO Group, were byproducts of Israel’s military intelligence and security apparatuses, whose veteran labor force had put their skills to work in Israel’s booming high tech private sector.[10] Gulf Arab states found in these Israeli companies a source of technologies and expertise that could be used not only to protect themselves from Iranian aggressions and secure their infrastructure, but also to gauge public opinion and surveil their oppositionists. Among the more coveted technological tools was NSO Group’s spyware, Pegasus, a sophisticated hacker tool capable of compromising smartphones. It came to light that Israel had greenlighted the sale of Pegasus to most of the states with which it signed peace agreements in 2020, who had in turn deployed it against human rights activists and civil society figures. Rumors also circulated to the effect that the Israeli government had also sold Pegasus to Mohammad bin Salman as a means of soliciting his support for the 2020 Abraham Accords.[11]

Saudi Arabia continues to view Israeli technologies as valuable instruments for addressing challenges to its domestic security—from the marginalized Ismaili and Zaydi tribes in the Saudi-Yemeni border region to the restive Shi‘i minority in the Eastern oil-rich province. Likewise, for a country that has identified the Muslim Brothers as one of its most dangerous threats, the same tools can be used to deal with the threat of Islamists and the proliferation of Islamist ideology. 

With encouragement from the Trump Administration, Saudi Arabia, Bahrain, and the UAE explored the risks and opportunities of official normalization with Israel. The UAE and Bahrain were more intrepid in their willingness to visit Israel and host Israelis. Still, it was no secret that Israeli and Saudi officials held regular meetings in Washington.^[12]  It also came to light that in November 2020 Israeli Prime Minister Netanyahu took a short flight to meet Bin Salman and U.S. Secretary of State Mike Pompeo in the Saudi desert.[13] Israel’s close coordination with Saudi Arabia was reflected in its support for the Saudis’ purchase of two Red Sea islands from Egypt in 2017. In exchange, Israel received a Saudi commitment to honor the terms of the Egypt-Israel peace treaty particularly as it concerned Israel’s freedom of navigation through the Strait of Tiran.^[14] The acquisition of the two islands was a necessary precursor to Bin Salman’s plans to build a new megacity called “Neom,” on the Red Sea, in the northwestern Tabuk province, at the intersection of Israel and Jordan and adjacent to Egypt’s Sharm el-Sheikh. A causeway is also planned to link Sharm el-Sheikh with Neom.

It is likely that Mohammad bin Salman also envisions other avenues of Saudi-Israeli cooperation to give his planned city the best chance of success. He envisions Neom as a technologically sophisticated and environmentally sustainable “smart city,” which will function as a hub for tech entrepreneurs and start-ups.[15] Israel is the regional leader in all these areas while Saudi Arabia’s workforce lacks the skills needed at the outset to realize his vision. The Crown Prince envisions Neom as a high-tech ecosystem, along the lines of Silicon Valley, which will attract foreign investment and expertise and serve as an incubator for research and development, entrepreneurship, and innovation, so that one day the Kingdom will be able to supply its own needs for high tech products from within. Toward that end, Bin Salman is likely trying to attract Israeli tech companies to invest in Neom, which is being built in close proximity to Eilat, Israel’s Red Sea resort town. 

Mohammad bin Salman has also shown an interest in having a role to play at Islam’s third holiest mosque, the al-Aqsa mosque in Jerusalem. It came to light that part of the efforts to gain Saudi support for Trump’s “deal of the century” peace plan (which Palestinians rejected outright), Israel toyed with the idea of granting Saudi Arabia a special role on the al-Aqsa compound.[16] Concurrent with that, Saudi media figures began to promote the idea that Jerusalem’s holy sites should be under Saudi administration, while Palestinian political and religious figures in Jerusalem told the media that Saudi Arabia appeared to be challenging Jordan’s role. Saudi Arabia, they said, reached out to local actors to coordinate visits of Saudi nationals to the holy places and invited Palestinian groups to the Kingdom for talks about al-Aqsa.[17] It appears that Mohammad bin Salman, whose official title will one day be “custodian of the two holy mosques,” was intrigued with the prospect that Israel might help him claim custodianship of all three holy mosques. Jordan’s King Abdullah, whose custodianship of the al-Aqsa compound is recognized by the 1994 Jordan-Israel peace agreement and a subsequent agreement with the Palestinian Authority, was furious when these machinations came to light.[18] He moved quickly against individuals in Jordan who had been collaborating with Bin Salman and reminded Israel and the U.S. that Jordan’s role on the holy esplanade is recognized by international law.[19]

While Palestinians view Mohammad bin Salman as self-centered, untrustworthy, and insensitive toward their plight, Saudi Arabia continues to reaffirm its support for the Arab Peace Plan in official statements. Saudi Arabia’s proposal was unveiled in 2002 by the late King Abdullah; it offered normalization with Israel in exchange for full withdrawal to the 1967 lines, a Palestinian state with East Jerusalem as its capital, and a just solution for Palestinian refugees. To turn the Saudi plan into a pan-Arab plan, Saudi Arabia had to accommodate Syria’s demands, which toughened the language about several issues, most notably the demand concerning refugees. Israeli officials were careful to praise the Saudis' efforts, while at the same time urged them to modify the Arab Peace Plan to strengthen the chances that it could form the basis of negotiations between Israel and the Palestinians.^[20] When asked about the possibility for normalization with Israel, Saudi officials continue to refer to the Arab Peace Plan, but there are hints that Saudi Arabia may be flexible about some of its specific stipulations. Recent Saudi statements have been less detailed about thorny issues, such as borders and the return of refugees, suggesting that there may be room for compromise. For example, in a July 2022 interview with CNN, Saudi Foreign Minister Adel al-Jubeir described the primary goal as a Palestinian state with East Jerusalem as its capital.[21]

For any Israeli government, a public ceremony and exchange of ambassadors with Saudi Arabia would be a crowning foreign policy achievement. For Mohammad bin Salman, growing relations with Israel have been part of a complex, multi-purpose and highly adaptable scheme which have already borne fruit in several areas. But calculations about regional, domestic, economic and regime security have all been drivers of unofficial normalization just as much as they have been restraints to full recognition. For example, Saudi Arabia has acquired useful counterinsurgency technologies from Israel but going too far with Israel could awaken Islamist sleeper cells and threaten domestic or regime security. Israel and Saudi Arabia have together lobbied Washington to try to prevent an American accommodation of Iran, but Saudi Arabia prefers to keep its option open for rapprochement. Israel’s posture toward Iran is confrontational, whereas Saudi Arabia’s posture toward the Islamic Republic has always been a balancing act which has produced periods of tension as well as periods of conciliation. Though Saudi Arabia engages in proxy conflicts with Iran, it is too vulnerable to risk a direct confrontation; thus far, it has preferred to deepen relationships with Iran’s enemies to use its influence with them as a bargaining chip and as a pressure tool in its transactional negotiations with Tehran, rather than conclude an arrangement that limits its ability to maneuver. At the same time, full normalization with Israel is like a resource being held in reserve, a resource that can be exploited when the gains outweigh the costs and the risks.