In a February 6 interview with Israel’s Channel 14, Israeli Prime Minister Benjamin Netanyahu commented on the possibility of establishing a Palestinian state, and suggested that Saudi Arabia could create a Palestinian state within its own territory because of the vast land resources it possesses. Several Arab countries condemned Netanyahu’s remarks, and the Saudi Ministry of Foreign Affairs issued a statement on February 8 emphasizing that the extremist mindset of Israeli leaders fails to grasp what Palestine means to the Palestinian people.
This statement followed a stern declaration from the Saudi Foreign Ministry after Netanyahu’s February 4 meeting with US President Donald Trump at the White House, during which Trump proposed permanently relocating Palestinians from the Gaza Strip. Trump claimed that Saudi Arabia desires only peace and had not conditioned normalization with Israel on the two-state solution. The Saudi Foreign Ministry’s statement reaffirmed the kingdom’s steadfast commitment to the establishment of a Palestinian state, referencing Crown Prince Mohammed bin Salman’s (MBS) September 2024 speech. In that address, MBS had reiterated Saudi Arabia’s insistence on establishing a Palestinian state with East Jerusalem as its capital and had stressed that the kingdom would not establish diplomatic relations with Israel without this condition being met.
Following the Foreign Ministry’s statements, a campaign in the Saudi media targeted Netanyahu, labeling him as a descendant of an extremist Zionist family. The situation appears increasingly complex, particularly as Saudi Arabia and other Arab nations reject proposals to relocate Palestinians from Gaza to Egypt and Jordan. This complicates President Trump’s plan to normalize relations between Israel and Saudi Arabia. Despite the current ceasefire between Israel and Hamas in Gaza, the repercussions of the war continue to hinder normalization efforts. Moreover, fears of significant regional destabilization resulting from the displacement of Palestinians from Gaza and the occupied West Bank limit Saudi and Arab options in countering the plans of the Israeli far-right, which is supported by Trump’s team. For Saudi Arabia, normalization has become entangled with the project of displacing Palestinians, prompting the kingdom to collaborate with Arab states to develop an alternative Arab plan that prevents displacement and garners American approval. This represents an initial test of the ability to manage disagreements between Saudi Arabia and US President Trump while maintaining the unique character of their bilateral relationship.
Trump’s Conflicting Projects
President Trump often views international issues through the lens of economic benefit, owing to his background as a real estate developer. He has framed the Arab-Israeli conflict as a real estate problem and proposed solutions within this framework. His latest project involves forcibly relocating Gaza’s population, acquiring the territory, which he has called a “big real estate site,” and transforming it into a “Riviera of the Middle East.” This logic reflects the Trump administration’s disregard for the two-state solution, a stance that contrasts with the Biden administration’s rhetorical emphasis on the issue, even as it fully supported Israel’s war on Gaza. Although Trump used the term “two-state solution” during his first term when he proposed his peace plan in 2020, he did not take it seriously, instead moving in the opposite direction through the Abraham Accords that normalized relations between Israel and some Arab countries.
The normalization project between Arab states and Israel, which largely bypassed the Palestinian issue, was central to Trump’s vision and that of his son-in-law Jared Kushner during Trump’s first term. They believed that Israel could be integrated into the region economically and security-wise, forming an Arab-Israeli alliance under American patronage to bolster US influence in the region against Iran and, secondarily, against China’s ambitions. This approach sought to marginalize the Palestinian issue entirely, reducing it from a political cause to a matter of economic livelihood.
In Trump’s second term, this thinking appears to be gaining momentum, particularly with several officials in his administration, such as National Security Advisor Mike Waltz, sharing the Israeli right’s perspective on the Palestinian issue. From this standpoint, Trump’s call to evacuate Gaza and relocate its population to Egypt and Jordan aligns with his administration’s efforts to bury the two-state solution permanently, end any discussion of Palestinian political rights, and shift the responsibility for managing Palestinian economic and security affairs onto Arab states, thereby supposedly ensuring Israel’s security. The two-state solution was never a western priority except to expand the model of the Palestinian Authority in the West Bank to manage Palestinians in a ghetto and protect Israel’s security, without granting Palestinians sovereignty. However, for the far-right Israeli government and its supporters on Trump’s team, this is not a sufficient guarantee for Israel’s security. Netanyahu has stated that a Palestinian state would mean another October 7—in reference to the Hamas attack on Israel in 2023—and thus the current approach is to remove the two-state solution from the table entirely.
For Trump, the projects of displacement and normalization are intertwined. Arab states are expected to bear the burden of Palestinians in the West Bank and Gaza, to protect Israel’s security and borders instead of the Palestinian Authority doing so, and simultaneously to establish relations with Israel involving security coordination, economic cooperation, and military partnerships. This is envisioned to further integrate Israel into the region and grant it a dominant role in shaping its future.
In this context, the American president appears unconcerned about the fate of the regional order that the United States itself engineered since the Camp David Accords of 1978. The burdens that Trump’s Gaza project would impose on Egypt and Jordan, as well as its potential consequences for Israel, do not seem to be a part of his calculations. Instead, the US president is more focused on the real estate prospects in Gaza after displacing its population and on advancing US interests by ending what he may label as the headache of the Palestinian issue and by fostering a close Arab-Israeli alliance.
Displacement vs. Normalization: The Saudi Perspective
In recent years, Saudi Arabia has signaled its openness to normalizing relations with Israel, hosting Israeli officials and athletes on its soil. In 2022, MBS described Israel as a potential ally, and two weeks before the attacks of October 7, 2023, in an interview with Fox News, he spoke of significant progress toward a historic normalization deal with Israel and expressed a desire to “reach a place that will ease the lives of Palestinians.” However, the events since October 7 have dramatically altered the regional landscape. The official Saudi discourse now insists on a credible path toward a two-state solution. Saudi Arabia announced plans to host an international conference in June 2025 in New York to advance this goal.
For Saudi Arabia, it is no longer possible to overlook the last 16 months in Gaza. The kingdom’s legitimacy as the custodian of Islam’s holy sites in Mecca and Medina is at stake if it normalizes relations with Israel without securing a tangible outcome that can be justified to Arab and Islamic publics. Saudi Arabia continues to value the benefits of normalization, such as a defense agreement with the United States, advanced arms deals with Washington, and American assistance with a peaceful nuclear program. But these benefits cannot be pursued at the expense of the kingdom’s Arab and Islamic legitimacy or regional stability, both of which would be jeopardized by displacement of Palestinians and Israeli annexation of the West Bank.
Saudi Arabia is also deeply concerned about the risks that Trump’s Gaza project poses to Egypt and Jordan. Aside from the feasibility of his proposal, the Saudis are uneasy about repeated American and Israeli statements regarding displacement and annexation, which threaten to destabilize the regional order—a strategic concern for Saudi Arabia’s vision of its role in the region. Additionally, Netanyahu’s remarks about establishing a Palestinian state on Saudi soil were seen as showing blatant disregard for the kingdom. The kingdom’s media campaign against Netanyahu reflects not only Saudi frustration with his dismissive attitude but also its genuine fears that his proposal could gain traction in Washington, especially in light of Trump’s suggestion that Gulf states could assist in implementing his plan. If Trump’s team recognizes the dangers of displacing Palestinians to Egypt and Jordan for US interests in the region, they might view Saudi Arabia and other Gulf states as ideal candidates for the project, given their vast financial resources, which perhaps the Trump administration believes would allow them to manage Palestinians more effectively in a geographically distant area that poses no direct threat to Israel.
For Saudi Arabia, Palestinian displacement significantly stymies the prospects of normalization. Thus, the two projects are not merely intersecting but fundamentally incompatible. This incompatibility represents one of the potential sources of disagreement with Trump in his second term, alongside his demands for lower oil prices, which conflict with Saudi Arabia’s interest in maintaining high oil prices to fund its domestic needs and Vision 2030 projects. The kingdom is beginning to realize that dealing with Trump in a second term will be more challenging than during his first. Nevertheless, the overall atmosphere between the two sides remains positive. Trump chose Saudi Arabia to host a February 18 US-Russian summit, and Saudi Arabia has avoided any negative remarks about Trump in the current crisis, focusing its criticism on Israel.
An Alternative Arab Plan
Saudi Arabia is leading Arab efforts to develop an alternative plan to Trump’s proposal. This plan focuses on rebuilding Gaza through a Gulf-funded initiative over a specified time frame, sidelining Hamas from governance, and establishing a Palestinian committee to govern Gaza without Hamas’s direct involvement. The plan is expected to be discussed among Gulf Coordination Council, Egyptian, and Jordanian leaders in a mini-Arab Summit in Riyadh on February 21, and officially announced at the Extraordinary Arab Summit in Cairo in early March. However, it remains unclear how this plan will be implemented, whether it will require Arab or international forces on the ground, and how it will address the continued presence in Gaza of Hamas’s military wing, the Qassam Brigades, and their weapons and tunnel networks.
For his part, Netanyahu may view Trump’s project as difficult to implement, having previously failed to execute the “Generals’ Plan” to evacuate northern Gaza. However, he may believe that American pressure to prevent rebuilding Gaza would encourage displacement. Moreover, pushing Arab states to address Israel’s security concerns and bear its burdens is a viable strategy for Netanyahu and members of Trump’s administration. Netanyahu has called on the Lebanese Army to disarm Hezbollah and undoubtedly would welcome Arab forces taking on the task of pursuing the Qassam Brigades in Gaza, sparing Israel the need to impose military rule or continue its costly war. This places Saudi Arabia and other Arab states in a delicate position, as they are unwilling to assume security responsibilities on Israel’s behalf while seeking to prevent regional destabilization through displacement. In addition, there is no consensus yet among Arab countries on how to respond, and there is a fear that any response could lead to a confrontation with Trump.
Netanyahu remains keen on normalization with Saudi Arabia, viewing it as feasible and as a personal achievement that he has pursued for years. But his priority is addressing the security threats surrounding Israel, and he is unwilling to make concessions on the Palestinian state issue for the sake of normalization. Instead, he seeks normalization that bypasses the Palestinian cause entirely. For its part, Saudi Arabia is in no rush to normalize relations, though it desires a defense agreement with the United States. The kingdom continues to pursue a policy of reducing regional tensions, avoiding conflicts, and strengthening its reconciliation with Iran, mediated by China. It may also play a mediating role between Iran and the United States on the nuclear issue, considering its concerns about Iran’s potential pursuit of nuclear weapons in the wake of the Gaza war and Israel’s attacks on Iran, Lebanon, and Syria.
The projects of normalization and displacement will serve as key indicators of Saudi Arabia’s ability to manage its disagreements with President Trump without entering into a direct confrontation with him. This will require careful balancing, particularly because of differences in vital aspects of the Saudi economy.
The views expressed in this publication are the author’s own and do not necessarily reflect the position of Arab Center Washington DC, its staff, or its Board of Directors.
Featured image credit: SPA
