Tensions have escalated between Israel and Palestinian militant group Hamas, sparking a halt to U.S.-backed efforts by Saudi Arabia to normalize relations with Israel. This signals a shift in Saudi foreign policy priorities, according to two sources familiar with Riyadh's thinking.
The conflict has pushed Saudi Arabia to engage with Iran, as Saudi Crown Prince Mohammed bin Salman and Iranian President Ebrahim Raisi held their first phone conversation. The call aimed to contain regional tensions amid the surge in Israel-Gaza violence.
Saudi Arabia and Israel have been moving towards a normalization deal, which would be a key step for Riyadh to secure a U.S. defense pact. However, with over 1,300 Israelis and 1,952 Palestinians killed so far in the fighting, the sources said talks on ties with Israel cannot continue for now.
The Palestinian issue and potential Arab backlash will need to be more central in future discussions. The U.S. has urged Saudi Arabia to condemn Hamas's attacks, but Saudi Foreign Minister Prince Faisal bin Farhan has resisted according to a U.S. source.
The conflict highlights challenges for U.S. efforts to integrate Israel in the region. Saudi Arabia had indicated it would not allow lack of Palestinian concessions to derail ties with Israel. But scenes of Palestinian casualties anger many in the Arab world.
The Saudi crown prince told the Iranian president Saudi Arabia opposes civilian targeting and backs the Palestinian cause, while seeking to reduce tensions. A senior Iranian official said the call had approval from Iran's Supreme Leader and aimed to prevent regional war.
Analysts say the crisis shows divergence between Saudi and Iranian visions for the region. The U.S. is asking regional countries to use channels with Hamas, Hezbollah and Iran to de-escalate.