Israel Resists Grand Bargain as U.S. and Saudis Work on Security Pact

Two years into President Biden’s term, his aides began negotiating with Saudi leaders to have the kingdom establish diplomatic relations with Israel. But when the Israel-Hamas war began last October, the talks withered.

American and Saudi officials have tried to revive prospects for a deal by demanding more from Israel — a cease-fire in Gaza and irreversible steps toward the founding of a Palestinian nation. Now those officials say they are close to a final agreement on the main elements of what the Saudis want from the deal: a U.S.-Saudi mutual defense pact and cooperation on a civilian nuclear program in the kingdom.

Secretary of State Antony J. Blinken spoke with Crown Prince Mohammed bin Salman, the de facto Saudi leader, about these matters in private on his visit last month to Riyadh, according to the State Department. And Jake Sullivan, the White House national security adviser, is expected to follow up when he goes to Saudi Arabia and Israel this weekend.

But there are no signs that Israeli leaders are moving to join them, despite the symbolic importance for Israel of establishing ties with Saudi Arabia, the most powerful Arab nation.

That resistance, along with a potential full-scale assault by the Israeli military on the Palestinian city of Rafah, puts in jeopardy a potential three-way grand bargain that Mr. Biden envisions as the foundation to a long-term solution to the decades-old Israeli-Palestinian conflict.

Prime Minister Benjamin Netanyahu of Israel has rebuffed calls for the creation of a Palestinian state, saying that it would become a “terror haven.” Most Israelis also oppose it, according to polls. Mr. Netanyahu has not proposed a governance system for Gaza, and Yoav Gallant, the defense minister, criticized him on Wednesday for the lack of such a plan.

Since Mr. Blinken’s visit to Saudi Arabia, American and Saudi officials have begun challenging Mr. Netanyahu by publicly saying they are getting closer to agreement on a package that they will offer Israel. Mr. Netanyahu can either take the megadeal and move toward regional peace and potential security cooperation with Saudi Arabia that could counter Iran, their shared adversary — or reject it and perpetuate the cycle of Israeli-Palestinian violence and Israel’s isolation in the region, they say.

“We continue to work to finalize both the bilateral pieces of such an agreement as well as what the pathway to an independent Palestinian state would look like,” Matthew Miller, the State Department spokesman, said this month.

The “bilateral” part was a reference to the talks between the United States and Saudi Arabia on their agreement, which in addition to a defense treaty would involve cooperation on a civilian nuclear program with uranium enrichment in the kingdom, the sale of advanced American-made weapons and, potentially, a trade deal.

U.S. officials have emphasized that Israel must agree to a Palestinian state for any agreement to be finalized. Mr. Sullivan delivered that message on May 4 at a Financial Times conference in London.

“The integrated vision is a bilateral understanding between the U.S. and Saudi Arabia combined with normalization between Israel and Saudi Arabia, combined with meaningful steps on behalf of the Palestinian people,” he said, adding: “All of that has to come together.”

This month, some Saudi and American policy analysts who were briefed by Saudi officials have argued that a bilateral deal — a “plan B” — might be the best course because the Israeli-Palestinian part seemed too difficult to achieve.

Saudi officials have not made any such suggestion publicly and continue to insist on a larger deal with an Israeli commitment on a Palestinian nation. But they have noted how far the U.S.-Saudi talks have advanced.

“We are very, very close; most of the work has already been done,” Prince Faisal bin Farhan, the foreign minister of Saudi Arabia, said at the World Economic Forum in Riyadh last month. On a pathway to a Palestinian state, he said, “We have the broad outlines of what we think needs to happen.”

He suggested that Israel could be persuaded, referring to “mechanisms within the toolbox of the international community that can overcome the resistance of any party, any spoiler, on any side.”

However, even the Saudis’ most immediate demand of Israel — a sustainable cease-fire in Gaza — seems out of reach for now. Israel has avoided committing to a permanent cease-fire, and efforts by Arab mediators to get Israel to agree to a temporary cease-fire for the release of some hostages faltered last week. At the same time, Israel has stepped up strikes in Rafah, where more than one million Palestinians have sought shelter.

Saudi Arabia, the United States and other nations have warned Israel not to carry out a major offensive there.

Given all that, Saudi officials remain wary of the domestic political cost of normalizing relations with Israel.

“At this stage, it looks like a long shot,” said Ali Shihabi, a Saudi analyst close to the government.

Some officials in the region say the United Arab Emirates and Bahrain got very little out of normalizing ties with Israel under the Abraham Accords that the Trump administration helped engineer in 2020. The Israeli government did not fulfill promises to respect Palestinian territory in the West Bank.

“We hear this from Saudis all the time: look what happened to the Emiratis, look what happened to the Bahrainis, when they went full on,” said Ghaith al-Omari, a senior fellow at the Washington Institute for Near East Policy.

Before the war, U.S. and Saudi officials planned to ask the Israelis for modest concessions for the Palestinians, U.S. officials say. But the stakes are higher now. Mr. Biden sees a deal involving a Palestinian nation as a critical component of the war’s endgame. And Israeli acquiescence to such a state could be the only way for Prince Mohammed to get broad support for the deal from citizens enraged by the killings of an estimated 35,000 Palestinians in Gaza.

Mr. Biden’s willingness to grant a mutual defense treaty and other benefits to Prince Mohammed is a sharp departure from his vow during the 2020 presidential campaign to ensure the country remains a “pariah” because of human rights violations. Those include the killings of civilians during the Yemen war and the murder in 2018 of Jamal Khashoggi, a Washington Post columnist and Virginia resident, by Saudi agents in Istanbul.

U.S. and Saudi officials are modeling the defense treaty on the pacts that the United States has with Japan and its other Asian allies. The two sides are trying to work out the conditions that would trigger a mutual defense clause.

Prince Mohammed wants a treaty that is ratified by a supermajority in the U.S. Senate. But administration officials say that would be hard without a robust Israeli-Palestinian component in the deal, since skepticism of Saudi Arabia is strong among many Democratic and some Republican lawmakers.

For Saudi Arabia, the biggest threat is Iran. Saudi officials remain bitter that the Trump administration did not intervene militarily when oil installations in the kingdom were attacked with drones and missiles in 2019 — an assault that Saudi and U.S. officials say was linked to Iran.

“The basic concept that they’ve been trying to establish is: What would trigger U.S. kinetic action in defense of Saudi Arabia?” said Hussein Ibish, a senior scholar at the Arab Gulf States Institute in Washington.

“Saudi Arabia and others, including the Emirates, don’t know when the U.S. would act,” he added.

U.S. officials say they also plan to extract promises from Saudi Arabia to limit cooperation with China on military matters and on advanced technology, and that the kingdom would continue to buy oil in dollars rather than renminbi, China’s currency. But some American analysts say they are puzzled about why U.S. officials insist this is an important reason to make a deal with the Saudis. China has no interest in being a security guarantor in the Middle East. And analysts say there is little chance that Saudi Arabia would forsake the dollar — which its own currency is pegged to — for the renminbi.

The Biden administration also hopes Saudi Arabia will commit to keeping oil prices from surging, especially as the U.S. presidential election approaches. U.S. and Saudi officials clashed over such perceived promises in 2022, when the Saudis went against Mr. Biden’s wishes.

Locking in American cooperation on a civilian nuclear program is important for Prince Mohammed. U.S. and Saudi negotiators are working out details of how the United States would maintain strict oversight of in-country uranium enrichment, officials say.

Prince Mohammed says he will develop nuclear weapons if Iran does so, and some U.S. lawmakers and many Israeli officials oppose Saudi Arabia having a nuclear program of any kind.

Karen Young, a senior research scholar at Columbia University’s Center on Global Energy Policy, said the nuclear program was the “No. 1 priority” for Prince Mohammed.

For Saudi Arabia, she asserted, “it’s always been a bilateral deal; it’s not a trilateral one.”

“Israel is so peripheral,” she said, “which is beyond ironic.”