Israel and Saudi Arabia Reach a Breakthrough in Normalization Talks - U.S. acts as a mediator

Israel and Saudi Arabia have reached a significant breakthrough in talks to normalize relations, which could also pave the way for a deal on the release of hostages held by Hamas and bring an end to the ongoing war in the Gaza Strip. Sources close to the discussions revealed that, instead of explicit Israeli recognition of a Palestinian state, as Saudi Arabia has long demanded, Israel has agreed to offer a more ambiguous commitment to "a path towards a Palestinian state." This wording would allow Saudi Arabia to maintain its stance of supporting Palestinian aspirations without forcing Israel into formal recognition.

The negotiations have accelerated following a ceasefire agreement with Lebanon, with Prime Minister Benjamin Netanyahu leading the talks through Minister for Strategic Affairs Ron Dermer. The Israeli government, including the political-security cabinet, has been kept largely out of the process, while the U.S. acts as a mediator and guarantor of the talks. Israel is coordinating with both the Biden administration and President-elect Donald Trump's team, which is expected to provide significant incentives, such as establishing a defense alliance between Saudi Arabia and the U.S., as well as the sale of advanced American weaponry to both countries.

Saudi Arabia’s Diplomatic Push
For years, Saudi Arabia has called for Israel to recognize a Palestinian state as part of any normalization agreement. In September, Saudi Foreign Minister Faisal bin Farhan al-Saud announced the creation of a coalition of Arab countries and international organizations to push for international recognition of a Palestinian state. However, Israeli officials close to Netanyahu believe that Saudi Crown Prince Mohammed bin Salman (MBS), the kingdom’s de facto ruler, has little personal interest in formal recognition of a Palestinian state. Instead, MBS sees progress on the issue as necessary to legitimize the agreement domestically, especially among Saudi public opinion and political-religious elites.

Hostage Release and Gaza Reconstruction
A key element of the talks involves the potential release of hostages held by Hamas. Saudi Arabia, eager to end the war and assist with the reconstruction of Gaza, is seen as crucial in facilitating a deal that would bring about the hostages' release. The first stage of the proposed deal includes the release of female soldiers, women, the sick, and adults over 50 years old, in exchange for Israel freeing hundreds of Palestinian prisoners, including convicted murderers. This would be accompanied by a ceasefire in Gaza and a gradual Israeli withdrawal, though the details of this phase, including its duration and specifics, remain unclear.

The second phase of the deal would see Saudi Arabia, alongside a coalition including the Palestinian Authority, lead the reconstruction efforts in Gaza, while ensuring Israel's security along its southern border. This aspect of the deal could help Saudi Arabia fulfill its moral obligation to the Palestinians, particularly in light of Gaza’s near-total destruction during the conflict.

Opposition Within Israel’s Government
Despite the progress in the negotiations, the proposed deal has faced significant opposition from factions within Netanyahu's own government. The far-right Otzma Yehudit faction has criticized the deal as "irresponsible," particularly because it involves the release of prisoners convicted of terrorism. In a statement, the faction declared that it would not abide by coalition positions on the matter and would vote according to its own stance in the Knesset. The Religious Zionist faction has also expressed its opposition to the proposed hostage swap and the involvement of the Palestinian Authority in Gaza's reconstruction.

Prime Minister's Office Denies
The Prime Minister's Office has strongly denied reports suggesting that Israel has committed to a "path towards a Palestinian state." A spokesperson for Netanyahu's office stated, "The report is a complete lie. Prime Minister Netanyahu has consistently acted against the establishment of a Palestinian state, which he believes would endanger Israel's security."

Uncertainty Ahead
As discussions continue, it remains uncertain whether the deal will be approved by Israel's government. The involvement of the Palestinian Authority in Gaza's reconstruction and the potential release of prisoners, including individuals convicted of terrorism, has sparked significant debate within the political leadership. With critical opposition from some of Netanyahu’s most vocal allies, the future of the deal hinges on how the government’s internal factions will align.

The outcome of these talks could redefine the geopolitical landscape in the Middle East, with Saudi Arabia and Israel potentially establishing a new, strategic partnership that could reshape the region's security dynamics. However, internal divisions in Israel and the complexities of the negotiations ensure that the path forward remains uncertain.