What is the US-Saudi deal and what does it have to do with Palestine?

The US is in the final stages of negotiating a landmark trade and defence agreement with Saudi Arabia, after failed attempts to see Riyadh normalise ties with Israel.

Officials from the Biden administration have emphasised that the deal is intended to be linked to a broader settlement involving Israel and the Palestinians, with media outlets saying the deal could "reshape the Middle East".

The New Arab examines what the deal entails, why it's happening now, how it relates to Palestine and Israel's war on Gaza, and its broader implications for the region.

What is the US-Saudi deal?

No specific details of the deal have yet been disclosed yet, but it is confirmed that the new terms would solidify and greatly expand Washington's existing defence agreement with Saudi Arabia.

The deal would almost certainly include a bilateral defense pact, granting Saudi Arabia the same status as US allies like South Korea and Japan in terms of protection and access to Washington's most advanced military technology. 

If confirmed, this effectively gives Riyadh benefits just short of NATO membership, and a firm military commitment from Washington.

Notably, even the US's close allies such as Qatar, Egypt, Bahrain, Jordan and Israel - which are all Non-NATO Allies - do not officially have this status.

The US is additionally likely to assist Riyadh in developing a civil nuclear energy programme, an initiative Crown Prince Mohammed bin Salman is particularly eager to establish, alongside high-level collaboration in artificial intelligence and other emerging technologies.

How is Israel and Palestine involved in the deal?

During a press briefing on Thursday, US State Department Spokesman Matthew Miller described the agreement as "one mega-deal" involving three components.

The first component is a bilateral security pact as outlined above, while the second and third components involve Saudi Arabia normalising relations with Israel in return for an irreversible pathway for the creation of a Palestinian state.

Significantly, the US insists that all these components must be met for the deal to proceed.

"All of them are linked together. None go forward without the others," Miller stated.

Does the deal specifically involve Israel’s war on Gaza?

As previously stated, the exact provisions of the deal are not yet known, but Miller referenced Gaza during his briefing on the potential agreement.

"The work that Saudi Arabia and the United States have been doing together in terms of our own agreements, I think is potentially very close to completion, but then in order to move forward with normalization two things will be required: calm in Gaza and a credible pathway to a Palestinian state," he said.

The choice of words is significant - the US has yet to support a peace deal in Gaza, and the use of the term "calm in Gaza" instead of "peace in Gaza" suggests that this stance has not changed.

This could imply Washington tacitly agrees with Israel's continued war goals of "eradicating Hamas", with "calm in Gaza" possibly being a euphemism for Israel controlling the enclave indefinitely.

Does this deal have any chance of happening?

Even before Israel's war on Gaza, the US put Saudi normalisation with Israel at the front and centre of its MENA policy agenda, with Biden looking to one-up his predecessor Donald Trump's Abraham Accords with Morocco, Bahrain and the UAE.

However, Israel’s war on Gaza, and the consequent regional and now global destabilisation, combined with the upcoming US presidential election in November, has allegedly made reaching this deal an imperative for Biden.

The US seems positive about its potential, with US Secretary of State Anthony Blinken speaking directly to MbS about the deal during an economic forum in Riyadh. 

Despite this urgency, significant roadblocks exist.

Most notably, Israel is firmly opposed to a two-state solution and the establishment of a viable Palestinian state.

Saudi Arabia has stated it will only normalise relations with Israel if the latter commits to a two-state solution.

These obstacles might see Riyadh attempt to circumvent Israel from the deal altogether, given it is hugely unlikely that Israel will support the legal right of Palestinians to a sovereign state.

Given the US has billed the deal as, effectively, all or nothing, it’s difficult to see how the deal goes forward without a major climbdown from Saudi Arabia or Israel.

Why is the deal happening?

For all the involved parties, the agreement would have obvious pros and cons. However, many see it as a US attempt to reassert its power in the region, following China’s attempts to cultivate itself as a major player in the MENA region, such as when it successfully brokered peace between Iran and Saudi Arabia.

For Saudi Arabia, despite normalisation with Iran, its mistrust and fear of Tehran's regional dominance remains strong. The defence pact with the US would mitigate many of these concerns, while US assistance in developing civil nuclear capacity would help the kingdom diversify its energy sources beyond oil.

For Israel, normalising with Riyadh would open up significant financial opportunities with the oil-rich kingdom.

As for the Palestinians, even though a two-state solution and "calm" in Gaza are part of the deal, there is widespread concern that the proposed two-state solution may not adhere to the legal framework outlined by UN Resolution 242, which mandates Israel's retreat to its pre-June 1967 borders. Instead, the deal could result in an inadequate pseudo-state shaped by Israel and the US. 

Washington has in the past expressed opposition to this, while it continues to block Palestinian statehood at the UN.

Another concern is that Saudi Arabia might accept the deal, including normalisation with Israel, without securing concrete commitments from Tel Aviv to establish a Palestinian state.