It wasn’t long ago that most of the world was focusing on a U.S.-Saudi-Israeli “big Middle East deal.” The current climate of death, destruction, and the catastrophe that is unfolding before our eyes is a long way from the exuberance surrounding potential Saudi-Israeli normalization in the weeks and months prior to the war.
It wasn’t long ago that most of the world was focusing on a U.S.-Saudi-Israeli “big Middle East deal.” The current climate of death, destruction, and the catastrophe that is unfolding before our eyes is a long way from the exuberance surrounding potential Saudi-Israeli normalization in the weeks and months prior to the war.
While some observers may be surprised by Hamas’s heinous Oct. 7 attacks and the eruption of a major war, others had long dreaded such an outbreak of violence. Due to the desperate desire of both Israel and the United States to see a normalization deal with Saudi Arabia, the unresolved and simmering Palestinian issue was largely ignored.
Both Israel and the United States had their respective reasons to push for normalization. For Washington, and in particular for President Joe Biden, being the broker of such a major deal would cement his legacy in history and provide a needed diplomatic talking point for the 2024 election campaign.
For Israeli Prime Minister Benjamin Netanyahu, having Saudi Arabia—the custodian of Islam’s two holiest sites—recognizing Israel would be a strategic victory. If Saudi Arabia agrees to normalize relations with Israel, there will be little else to pressure the Netanyahu government, or any future Israeli government, with to ensure significant concessions and facilitate a political settlement that ushers in security for both Palestinians and Israelis.
As soon as the war erupted, there was an ominous feeling that a humanitarian catastrophe was going to ensue. There was little doubt that Arab states would condemn Israel. What was less clear was how Arab states would use their leverage. The energy landscape has changed dramatically from 1973, and therefore, the “oil card” was not going to hold much sway today.
This then raises the question of how Saudi Arabia will use its leverage in this crisis. While oil is no longer an effective instrument of leverage over the United States and Israel, Riyadh does have some tools in its diplomatic arsenal that—if deployed properly—will give it a say in shaping the future of Israel and Palestine.
As the war continues, both Israel and the United States are losing credibility. Forcibly displacing refugees from their homes, and then cutting off humanitarian essentials, is hardly a way to gain any support, let alone legitimacy for a military campaign. As the humanitarian catastrophe grows, the United States is losing international credibility, not least in the Middle East. While it is unrealistic to see any Saudi action that could force Israel to stop its war in Gaza, Saudi Arabia is using its symbolic position as the guardian of Islam’s holiest sites against Israel.
Riyadh is leading a diplomatic effort designed to generate an international narrative that questions the legality of Israeli military aggression, and the U.S. diplomatic cover it is utilizing. Not only are the Saudi ruling elites rejecting the Israeli self-defense argument, but they are also going on the diplomatic offensive. Saudi Foreign Minister Faisal bin Farhan is leading a diplomatic committee mandated by the Arab League and Organization of Islamic Cooperation, to tour various international capitals and argue for an immediate cease-fire.
The committee’s first stop was in Beijing and then Moscow. This was a clear signal to Washington that Saudi Arabia has other options in this ever-evolving multipolar world. In addition, the committee’s presence in the United Nations and the constant proposals by the Arab-Islamic group are designed to keep diplomatic pressure on the United States, by highlighting it as an obstacle to a cease-fire.
The Saudis are also using an overlooked diplomatic tool: silence. Their outright refusal of any political discussion before a cease-fire is also generating pressure by disallowing Israel a clear political horizon after the campaign. As the Saudi foreign minister said last month: “What future is there to talk about when Gaza is being destroyed.”
The Saudi ruling elites have another reason to avoid any discussion about the “day after.” They believe entertaining this idea won’t help achieve a permanent cease-fire and could be seen as being complicit in giving the current Israeli campaign a tacit legitimacy that is missing. Riyadh has been there before.
In 2006, when the Hezbollah-Israel war erupted, the then-Saudi ruling elites had a pragmatic position that balanced criticism of both Israel and Hezbollah. Saudi Arabia stated at the time that while it supported pan Arab causes, a “distinction must be made between legitimate resistance and uncalculated adventures undertaken by elements inside [Lebanon] and those behind them.”
Given the measured response, and the general expectation of an outright condemnation of Israel, this dual criticism was interpreted as tacit sign of tolerance of Israel’s behavior. This is something that Riyadh wants to avoid today. It does not want to allow itself to be politicized for Israeli political ends. In other words, the Saudi ruling elites want to avoid being “spun.”
Netanyahu is often dubbed the “master of spin.” The Saudis know that if they initiate any political discussion about the day after, or even hypothesizing about future scenarios, this will certainly lend itself to Netanyahu’s spinning tendencies. One can see how Netanyahu spun medical assistance to Gaza by the United Arab Emirates as if the Emirati support had been based on Netanyahu’s request, and not a response to the dire medical crises ensuing there. Saudi Arabia has a good sense of how its actions and statements can be spun in a way that suggests the Saudis and Israelis are on the same page regarding the day after for Gaza, which is far from the reality.
Where Riyadh has real leverage is when it comes to financing. Israel will never match the financial capacity of Saudi Arabia and other Gulf Cooperation Council (GCC) states. Its economy is struggling, and according to a recent report by the Bank of Israel, it is losing $600 million a week during this campaign. The Israeli central bank has also suggested that the war costs from 2023 to 2025 will amount to some $53 billion.
This is precisely what gives Saudis, GCC states and Arab states leverage, as any reconstruction efforts can be used to nudge Israel toward a genuine peace process. Otherwise, it will only be a matter of time until the region finds itself in the same situation again—if not worse.
The Saudis have never been averse to financial support to the Palestinians. They have provided a great deal of that over the decades, and it does not look as if such support will subside soon. What the Saudis are averse to is rebuilding a decimated Gaza for the sake of Israeli security—especially given that Israel was the party that carried out the destruction.
There is currently wishful thinking in Israel and Washington that Saudi Arabia and other GCC states will pay the bill for Israel’s military campaign in Gaza. According to a leak to the Israeli press, Netanyahu reportedly told a parliament committee on Dec. 11 that “the first step in Gaza will be to defeat Hamas. After that, I believe that the United Arab Emirates and Saudi Arabia will support the rehabilitation of the Strip.”
To assume that Saudi Arabia and GCC states would readily agree to pay for the reconstruction of an inherited catastrophe, and then take responsibly for its security, reveals the naïve illusions entertained by many in Israel and the West. Western and Israeli discourses often depict the GCC states as irrational actors that spend first and think later—as if the GCC states’ only function in the world system is to throw money at other states’ problems. This is far from the reality. Nowadays, nothing in Saudi Arabia is spent unless it is deemed to be serving the kingdom’s interest; “Saudi Arabia first” is the principle that Saudi’s foreign policy is based on.
One of the difficulties of raising Saudi funds for reconstruction efforts is that Saudi Arabia itself is undergoing its own rebuilding process. Currently, the country has set itself a mammoth task of restructuring the state, building mega projects that are crucial to its Vision 2030 initiative, in the hope of eventually diversifying the Saudi economy away from oil to ensure the survivability of the state for generations to come. The Saudis do have the money, but it is for investing in Saudi Arabia’s future. Yet, this does not mean the Saudi ruling elites are not willing to invest in a future Palestinian state and contribute significantly to the rebuilding of its infrastructure.
The incentives for Saudi Arabia and other Arab states to contribute toward a reconstruction of Gaza can be increased if done right, within the right framework, with the right horizon, and with the right goals. Chief among these common goals is regional security, as this war has shown that the Palestinian issue is something that cannot be swept under the rug any longer.
This war also demonstrated the spillover risk—from the Lebanon-Israel border to Houthi attacks on international ships in the Red Sea off Yemen’s coast—it has the potential to destabilize the entire region. This regional risk can serve as leverage for the Saudis vis-à-vis Israel and as an incentive to pursue lasting peace.
“Regional prosperity” is a term commonly used by Crown Prince Mohammed bin Salman. It is precisely this angle that one can see Saudi investment in the restructuring of Gaza but only as part of a political process with clear political horizons that seeks to resolve the core issues of this conflict. Saudi Arabia already has leverage over Israel by not offering normalization, but Riyadh leading a reconstruction effort only amplifies Saudi political leverage over Israel, as without functioning infrastructure in Gaza, security concerns for Israel will only increase.
Given the nature and complexity of this conflict, there is no single leader who can take charge but rather a few leaders who can influence the situation by using their respective leverage in a harmonized, coordinated process. To assume that Riyadh will take charge, notwithstanding the kingdom’s recent muscular foreign policy, is not likely.
The truth is that Saudi Arabia has always had a leading role in this conflict, but it preferred a leading-from-behind approach. This approach allowed it to use its diplomatic and symbolic weight without being on the political front line and potentially risking its strategic interests. The Saudi ruling elites came to the conclusion that they had mustered a great deal of political effort for a fruitless process and thus have never injected themselves into the intricacies of the Palestinian-Israeli final status negotiations.
The problem with the previous peace process is that it proved to be structurally doomed to fail, given the dramatic asymmetry in power between Palestinians, Israel, and its ardent defender in Washington. Before Riyadh steps up and shows greater assertiveness on this issue, the Saudi ruling elites need to see a clear political horizon and an improved structure to the peace process. At that point, they might use their considerable financial leverage to shape the outcome.
Aziz Alghashian is a fellow with the Sectarianism, Proxies & De-sectarianisation (SEPAD) project at Lancaster University’s Richardson Center and an associate fellow at the Center for Applied Policy Research with the Orient (CARPO). He specializes in Saudi foreign policy toward Israel.
