June 23, 2024

(Bloomberg) — Saudi Arabia’s Crown Prince Mohammed bin Salman had a vision for the Middle East that placed shared economic benefits at its heart — including an historic alliance with Israel.

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Even a potential solution over a Palestinian state didn’t seem beyond the realms of possibility — a longstanding sticking point between the two countries. “Good negotiations” are ongoing to achieve that goal, the 38-year-old de facto Saudi leader said in an interview with Fox News last month. The US is pushing the talks and “the biggest historical deal since the end of the Cold war” is a realistic prospect, he told the TV channel.

After last weekend’s deadly attacks by militant group Hamas on Israel, those hopes have been upended. The incursion also turns attention toward Iran, which has never wavered from its policy of armed resistance to Israel and is a financial and military backer to Hamas.

And Crown Prince Mohammed appears to be already tempering his enthusiasm for a deal with Israel in the short-term by defaulting to the kingdom’s more solemn official stance on the Israeli-Palestinian conflict.

“The kingdom will continue to stand by the Palestinian nation in its quest for its legitimate rights,” he said in a press release after a phone conversation with Palestinian Authority President Mahmoud Abbas on Tuesday.

Sanam Vakil, director of the Middle East and North Africa program at London’s Chatham House think tank, said the attack underscored the idea that a policy of “containment” on Iran and the Palestinian-Israeli conflict isn’t an effective way of managing regional security.

“This pours cold water on the mirage of de-escalation,” she said.

Minimizing Threats

MBS, as the oil-rich kingdom’s crown prince is known, had previously taken steps to deescalate regional tensions and minimize threats to his multi-trillion-dollar plan to transform Saudi Arabia’s economy by 2030. The kingdom is the home of Islam’s two most holiest sites, giving it particular importance in the region and creating a tricky balancing act between religious and secular objectives.

The prince’s pitch has been that economic development and prosperity in his country will benefit a region mired for too long in wars and ideological differences.

To that end, he forged a Chinese-brokered deal in March with regional rival Iran, embarked on direct negotiations with Tehran-backed Houthi rebels in neighboring Yemen — against whom he had waged war for eight years — and made overtures to Syria’s pariah President Bashar Al-Assad.

He has said Saudi Arabia’s own economic success hinged on a stable, peaceful and thriving region that gave everyone including Iranians and Palestinians “a good life.” He told Fox News he wanted something substantive for the Palestinians as part of a three-way bargain with Israel and the US, but declined to be specific.

Read More: White House Weighs Defense Treaties to Aid Israel-Saudi Pact

Deadly Fallout

Hamas’s surprise attack on Israel — which has left at least 1,500 people dead on both sides — effectively rules out any agreement between Israel and the Palestinian authorities that would help achieve Saudi Arabia’s objectives. That means any normalization deal between Israel and Saudi Arabia is probably on hold for the foreseeable future.

Hamas’s attack “stalls Saudi Arabia’s stabilization and development plans” for the region, said Lina Khatib, director of SOAS University of London’s Middle East Institute.

That might actually be a lesser worry for MBS than how events have been playing out among the Saudi population.

In a country where the government tightly controls social media posts and people have been arrested for being too outspoken about certain issues, many Saudis took to the internet to praise Hamas’s actions and denounce Israel.

Othman Al-Khuwaiter, a Saudi energy sector expert and columnist based in the eastern Saudi city of Dhahran, reveled in what he characterized as the humiliation of Israelis.

“God willing, this will be seared in their memories forever,” Al-Khuwaiter wrote. “They are under siege just when they thought they were masters in full control.”

At the start of the attack over the weekend, Saad Al-Bazei, a professor of English at King Saud University in Riyadh, hailed “the unprecedented and glorious achievements of the Palestinian resistance deep within Israel.”

Social media accounts of individuals that normally post every utterance by MBS and praise his every move were quick to hit back.

‘Grand Project’

“This is an attack on Saudi Arabia’s grand project for the Middle East and we must be in solidarity with the state of Israel,” Badr Al-Saadoun, a Riyadh-based lawyer, wrote on social-media site X.

The Saudi Foreign Ministry called for an “immediate end to escalation by both sides” but added that “the exploding situation” was a result of Israel’s “occupation and deprivation of the Palestinian people of their legitimate rights and the systematic provocations against their sanctities.” The statement was widely shared by Saudis defending Hamas’s actions.

Mark Dubowitz, chief executive of the Foundation for Defense of Democracies, a Washington-based think tank that has been involved for years in efforts to forge Saudi-Israeli normalization, said the statement angered many of Israel’s allies in the US and prompted calls to Saudi officials in Riyadh and Reema bint Bandar, the Saudi ambassador in the US.

A spokesperson for the embassy said he couldn’t immediately comment.

As Israeli Prime Minister Benjamin Netanyahu vowed massive retaliation for Hamas’s actions, it would be unthinkable for MBS to deliver an Israel normalization deal to his people during carnage in Palestinian territories, Dubowitz said.

Iran’s Khamenei: Hamas Attacks Were Response to Israeli ‘Crimes’

“This is very much what” Iran’s Supreme Leader Ali Khamenei intended,” he said.

–With assistance from Fahad Abuljadayel and Matthew Martin.

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