US Plays Down Talk of Breakthrough on an Israel-Saudi Accord

The US and Saudi Arabia continue to work on a framework aimed at Saudi recognition of Israel in exchange for US security guarantees for Riyadh — though the Biden administration signaled Wednesday there’s still a long way to go.

(Bloomberg) — The US and Saudi Arabia continue to work on a framework aimed at Saudi recognition of Israel in exchange for US security guarantees for Riyadh — though the Biden administration signaled Wednesday there’s still a long way to go.

“There is no agreed-to set of negotiations, there’s no agreed-to framework to codify normalization or any of the other security considerations that we and our friends have in the region,” John Kirby, spokesman for the US National Security Council, told reporters. “But there is a commitment by the administration to keep talking, and to keep trying to move things forward.”

People familiar with the kingdom’s stance echoed those comments, saying there’s no guarantee of success in the talks.

Israeli assets rose after the Wall Street Journal, citing American officials it didn’t identify, reported that Washington and Riyadh had agreed on the broad outlines of a deal. The officials warned they faced long odds but were hopeful they could decide on “finer details” within a year, the newspaper reported. 

There’s been “a flurry of activities on multiple nodes, but it feels vastly premature” to suggest that even a framework deal is imminent, said Brian Katulis, vice president of policy at the Middle East Institute in Washington. From domestic politics in each country to the regional instability created by Iran and its proxies, Katulis said an agreement is unlikely to be completed before the end of this year and perhaps not before the 2024 US elections.

Core Issues

The US and Saudi Arabia must agree on three core issues: the civil nuclear program the kingdom is seeking, security assistance and an executive agreement on defense — not a mutual-defense treaty that would require US Senate approval, according to Aaron David Miller, senior fellow at the Carnegie Endowment for International Peace.

“We’re dealing with two of the most problematic partners in this little arrangement,” Miller said, citing “a lot of animus” between President Joe Biden and Saudi Crown Prince Mohammed bin Salman as well as “strained” relations between Biden and Israeli Prime Minister Benjamin Netanyahu.

Israel’s national security adviser, Tzachi Hanegbi, told journalists Monday that “we are waiting for the Americans to give us a complete plan regarding Saudi normalization.”

“We expect to see a proper plan or proposal by the end of the year,” he said.

Netanyahu told Bloomberg on Sunday that his country and Saudi Arabia will deepen economic and business ties even if they don’t formally recognize each other.

Read more: Netanyahu Says Bet on Israel and Saudi Arabia Deepening Ties

Still, a deal would have “enormous economic consequences for investors,” Netanyahu said. “If they had to bet on it, right now I’d bet on it. But I can’t guarantee it.”

The shekel strengthened and stocks in Tel Aviv advanced on the Wall Street Journal report. A potential agreement could boost investor confidence in the country at a time when the government’s plans to overhaul the judiciary have triggered mass protests and a selloff in financial markets.

The currency gained as much as 1% to 3.68 per dollar on Wednesday before paring its advance. The benchmark stock index rallied 1.4%.

Biden, who is keen for Saudi Arabia to recognize Israel, sent National Security Advisor Jake Sullivan to the kingdom last month, partly to discuss the issue.

Riyadh has expressed frustration in recent months over Israel’s deteriorating relations with the Palestinians — typified by the recent raid on a refugee camp in the West Bank and incendiary comments by some far-right members of Netanyahu’s coalition.

Analysts expect Washington to seek concessions from Israel on behalf of the Palestinians, but suggest those could be limited to assurances that the door remains open to a two-state solution, to which the Biden administration remains committed.

Earlier: Arab States Sour on Israel in Blow to US Aim of Saudi Peace Pact

Privately, the Saudis have asked for firm defense guarantees from the US, access to top-notch American weaponry and for the White House to allow it to enrich uranium domestically as part of a plan to build nuclear power plants.

Normalization would be a significant coup for Israel. While it’s signed historic diplomatic deals with the United Arab Emirates, Bahrain, Morocco and Sudan since 2020, Saudi Arabia is the biggest economy in the Middle East, with the government investing trillions of dollars to diversify from oil. In addition, it’s the guardian of Islam’s two holiest sites at Mecca and Medina.

–With assistance from Andras Gergely, Jordan Fabian, Vivianne Rodrigues and Alisa Odenheimer.

(Updates with reporting from Saudi sources.)

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