While progress has reportedly been made in talks, there are many complicating factors to securing such an historic deal.

In recent months, a drumbeat has built around the U.S. effort to negotiate a normalization agreement between Israel and Saudi Arabia. The deal would be a tectonic shift in Middle East geopolitics, but also carries major implications for other actors beyond the three negotiating parties. Israel would, of course, benefit from normalized relations with the Saudis — long seen as the “holy grail” of potential normalization agreements for the country. The Saudis, in turn, would see their interests advanced through strengthened U.S partnership in key areas. But this deal could also have serious implications for the future of the Palestinian national movement and, further afield, for the role of China in the Middle East.

The speculation that the agreement is around the corner received an adrenaline shot last week as both Israeli Prime Minister Benjamin Netanyahu and Saudi Crown Prince Mohammad Bin Salman (MBS) indicated that progress had been made. But major obstacles remain in a deal that aims to address shared interests while requiring each of the major parties to make compromises that could meet strong domestic headwinds.

USIP’s Lucy Kurtzer-Ellenbogen, Hesham Youssef, Robert Barron and Adam Gallagher explain what this deal would look like, the obstacles to achieving it, how it compares to the Abraham Accords and how China factors into the U.S. pursuit of this agreement.

What do we know about the respective interests, potential contours of and roadblocks to a Saudi-Israel normalization agreement?  

Kurtzer-Ellenbogen and Barron: At the heart of the potential deal lie Saudi asks of the United States: chiefly, formalized U.S. security guarantees and U.S. support and cooperation for the development of a Saudi civilian nuclear program. In parallel, Saudi Arabia and the United States are expected to require Israeli concessions that minimally provide benefits to the Palestinians and that maximally reinforce the shared Saudi and U.S. position of preserving the possibility of a two-state solution to the Israel-Palestinian conflict.

For the United States, this would be seen as a major foreign policy win, advancing regional integration by building on the Abraham Accords with the most sought-after player; re-injecting momentum, or minimally focus, on a political horizon for the Israeli-Palestinian conflict; and all while creating opportunity to push back on China’s rising influence in the region. For Israel’s part, normalization with the Saudis would not only bring untapped economic benefits, but fundamentally reshape its place in the region, and potentially broader Islamic world.

But there are major challenges to consummating such a deal between a triangle of actors whose interests don’t neatly align and, in key areas, starkly diverge. Indeed, the obstacles to this agreement are baked into the respective sides’ asks. There are those for whom the Saudi request for an American security guarantee seems more risk than reward. Agreeing to protect the Saudi monarchy with American troops in a historically unstable region of the world runs counter to a common assessment that the American public is averse to foreign entanglements and any prospect of American “boots on the ground.” Relatedly, should such an agreement be framed as a “treaty” it would require affirmative votes from two-thirds of the Senate. 

The Saudi request for Israeli concessions toward the Palestinians — concessions that could explicitly reset the horizon toward a two-state solution — seem impossible for the current Netanyahu-led Knesset to withstand. On the flip side, should the Saudis settle for less than what some might consider meaningful concessions to the Palestinians — actions that would move beyond improving lives to rolling back the occupation — this too would raise challenges to U.S. approval of the deal.

The Saudi request for allowance to enrich its own uranium with minimal international oversight seems difficult for the United States, Israel and many other actors to swallow, given the broad opposition to a Middle East nuclear arms race. Finally, the American desire to see the Saudis distance themselves from China and Russia and embrace human rights and democratic standards could run up against the Saudi government’s seeming desire to cherish strategic flexibility, independence in energy decisions and reform on its own terms.

Still, it’s clear the principals — Biden, MBS and Netanyahu — are motivated to reach a deal if appropriate terms can be reached. To this end, over the past few months, but with seeming acceleration over recent weeks, potential avenues toward overcoming obstacles and mitigating the kaleidoscope of concerns have begun to emerge. On a security arrangement, the sides seem to be exploring an arrangement similar to U.S. security relationships with South Korea and Japan, rather than the guarantees offered under NATO. On the nuclear program, the United States and Israel are reportedly working together on a proposal that satisfies each side’s oversight concerns.

The Palestinian issue may be an ultimate determining issue for this process. Both the Biden administration and the Saudi leadership have been clear that they expect the agreement to result in positive steps toward resolving the Israeli-Palestinian conflict through a two-state solution, which both endorse. The Palestinians have been actively engaged with the Saudis in this process, reportedly delivering a list of requests for the Israelis and Americans. Politics in the United States, and Saudi domestic and regional considerations seem to require progress in this regard and the Palestinians have internalized lessons from their reaction to the Abraham Accords and sought to proactively shape and benefit from what they believe may be an inevitable agreement.

The barrier to creative solutions may be within Israeli politics, where major parts of the right-wing coalition would forego normalization with Saudi Arabia should such an agreement require ceding land to the Palestinians. At the same time, with the UAE having made suspension of annexation a condition for entering the Abraham Accords, the Saudis will be hard pressed to not minimally meet, let alone exceed, a territorial requirement for granting full normalization. Thus, some have speculated that current efforts may be laying the groundwork for an agreement with a future, more centrist Israeli government. Netanyahu has pushed back on speculation that this will be necessary to seal a deal. It is also no foregone conclusion that the politicians necessary for Netanyahu to shape a new coalition would be willing partners.

Still, as the question mark hovers over the deal’s viability, the primary parties are clearly engaged in piecemeal efforts to signal intent, build confidence and offer sweeteners that could blunt opposition where it exists, or engender agreement and cooperation where skepticism and reticence reign. This week has witnessed some parallel firsts when Saudi Arabia’s first ambassador to the Palestinian Authority presented credentials to President Mahmoud Abbas in Ramallah, and Israel sent an official delegation to Riyadh for a U.N. conference. The United States also granted Israel long-sought entry into the visa waiver program, verifying that the latter had met key requirements over the course of the pilot period, including granting Palestinian-American visitors to Israel the same entrance and movement rights as all other Americans. For their part, seeking to mitigate potential losses and maximize potential gains, the Palestinians reportedly pledged not to publicly criticize any potential deal.

What are the similarities and differences between this process and the Abraham Accords?

Youssef: The two situations are difficult to compare as the Abraham Accords were successfully concluded three years ago and the effort to achieve Israeli-Saudi normalization is ongoing and facing huge challenges as indicated above. However, some comparisons are readily apparent in terms of process, significance and room for maneuvering.

While the Abraham Accords were concluded in complete secrecy and the Palestinian leadership was not consulted throughout the negotiations, this is not the case in the current negotiating process where the Palestinians have been put “on notice” of what may come. Therefore, contrary to the sharp impulsive Palestinian overreaction against the Abraham Accords, they have sought to engage to make their interests heard.

On this point, both the United States and Saudi Arabia recognize that there has to be a significant Palestinian component in this process. As articulated in recent days by Emirati former Minister of State for Foreign Affairs, Anwar Gargash, the Palestinian issue was not instrumental in motivating the Abraham Accords, even if the UAE had previously contended that they were “really about stopping annexation and saving the two-state solution.”

The Abraham Accords were signed when Netanyahu was more in control of the Israeli government. Now, with the most extreme government in Israel's history, he no longer commands the same level of control or ability to decide on Israeli concessions for the normalization that he prioritized. It also remains to be seen whether the current U.S. administration will be as willing to respond to the demands presented by the parties as the previous administration was.  

Finally, Saudi ambitions in the region and more broadly in the Islamic world will necessitate that the Palestinian component in the normalization agreement be seen as significant from a Palestinian, Arab and Islamic perspective.

As for the similarities, it is recognized that Saudi Arabia is more significant for Israel than the Abraham Accord countries. That said, both agreements would rightly be considered transformational in their impact on relations between Israel and countries of the region and beyond.

Last but not least, both approaches are not in conformity with the sequence spelled out in the Saudi-inspired Arab Peace Initiative (API) of 2002, which indicated that normalization would take place in the context of achieving the two-state solution with the creation of a Palestinian state, “on the territories occupied in 1967” and with East Jerusalem as its capital, it can be argued that an agreement with Saudi Arabia is the last chance to leverage meaningful progress toward a two-state solution. However, both have not to date diverged from commitment to the broad contours of the API end-of-conflict requirements, even as the sequencing has been compromised.

How does China factor into the U.S. efforts to secure this deal?

Gallagher: There’s no denying that U.S.-China competition is also a major factor in Washington’s ardent pursuit of this deal. While Southeast Asia is generally considered the primary vector of U.S.-China rivalry, the Middle East has increasingly become a key geopolitical theater. And China has made major inroads in the region in recent years. Just last week, Syrian President Bashar al-Assad inked a “strategic partnership” with Beijing while in China, Kuwait’s crown prince visited with Xi Jinping, and $23.4 billion in deals were signed at the China-Arab Trade Expo.

But it’s the China-Saudi relationship that has really taken off. The Saudis are leveraging these ties in normalization talks with Washington. Riyadh is considering a Chinese bid to build a civilian nuclear-power plant in the Kingdom with no conditions on nonproliferation issues. Washington has said that U.S. nuclear assistance for the Saudis would be contingent on nonproliferation restrictions.

In December 2022, Xi made one of his first post-COVID trips to Saudi Arabia, where he signed a number of bilateral deals on technology, infrastructure and security. China helped broker Saudi-Iran détente this March, after decades of enmity between Riyadh and Tehran. The Saudis are joining the BRICS grouping — made up of China, who led the push for BRICS expansion, and Brazil, Russia, India and South Africa — in 2024 and, Riyadh became a dialogue partner of the China-led Shanghai Cooperation Organization in 2021.

Saudi Arabia was China’s top crude oil supplier in 2022 and China is the biggest purchaser of Saudi oil. They have also discussed the Saudis pricing oil in Chinese yuan, which Washington has expressed considerable concern over. Since the 1970s, the Saudis have helped ensure the dollars’ dominant status as the global reserve currency by agreeing to price oil in greenbacks.

Beyond oil, the China-Saudi economic relationship has blossomed in recent years, particularly in areas like construction, technology, water and weapons. MBS also surely prizes China’s policy of “non-interference” in domestic affairs, particularly in light of tensions with the Biden administration over Saudi human rights abuses and the high-profile murder of journalist Jamal Khashoggi.

Washington isn’t being coy about its desire to pull Saudi Arabia away from China’s orbit. The security guarantee that the Saudis seek is a serious and weighty commitment for the United States. In return, on the China front specifically, the United States wants assurances that Saudi Arabia will: move away from China economically and militarily; agree to not build Chinese military bases in Saudi Arabia; limit the use of Huawei technology; and continue to use the U.S. dollar to price oil. 

It may seem that China has the upper hand with the Kingdom, but there is a reason that the Saudis are asking Washington for security guarantees. Even as China has expanded its relationships and economic influence in the Middle East, countries in the region still see America as the ultimate security guarantor and partner. China itself recognizes that the United States is the key security provider in the Middle East and is in no position to supplant it, for now.

As U.S.-China rivalry intensifies, so-called middle powers, like Saudi Arabia, will continue to leverage geopolitical competition to advance their interests. Washington should be mindful that it doesn’t give up too much in this complicated diplomatic struggle.