For years, a normalization deal between Saudi Arabia and Israel has been described as the ultimate prize in “Middle Eastern Diplomacy” — the keystone that would complete the Abraham Accords and reshape the region’s geopolitical architecture. Washington has pushed hard. Riyadh has signaled openness. Jerusalem has expressed eager anticipation. Yet as 2026 unfolds, the gap between aspiration and reality has never been wider, especially after the recent dangerous escalation in the region since last March.
The core obstacle remains unchanged: Saudi Arabia insists on a credible, irreversible path to a Palestinian state. Israel’s current government rejects that categorically and insists that a Palestine State is not a “realistic option”. This is not a technical disagreement to be argues and resolved by diplomats. It is rather a fundamental clash of strategic visions, and it explains why a deal before 2029 is highly unlikely.
For Israel, Saudi recognition would be transformative. It would mean acceptance by the Arab world’s most influential state—home to Islam’s two holiest cities and the custodian of enormous religious and political weight. Israeli leaders see normalization as a once-in-a-generation opening to move from relative isolation into an embedded partnership with the region. Beyond symbolism, the practical benefits are substantial: shared intelligence against Iran, economic cooperation in technology and trade, and a regional alliance structure that would give Israel strategic depth it has never enjoyed before.
For Saudi Arabia, the calculus is different but equally compelling. Crown Prince Mohammed Bin in Salman’s Vision 2030 depends on transforming the kingdom from an oil-dependent economy into a hub of trade, technology, and logistics. Normalization with Israel would unlock American security guarantees, access to advanced F-35 fighter jets, and cooperation on a civilian nuclear program. It would also position Riyadh as the indispensable bridge between Asia, Europe, and the Middle East – a role that the India-Middle East-Europe Economic Corridor (IMEC) is designed to institutionalize.
Yet Saudi Arabia is not simply waiting for the right price. It is hesitating for reasons that are deeply structural. The war in Gaza, which left tens of thousands dead and turned Arab public opinion sharply against Israel, has hardened Riyadh’s position even further. The Saudi leadership cannot afford to appear indifferent to Palestinian suffering while pursuing a deal that would legitimize the Israeli government responsible for it. This is especially for a country recognized to be one of the leaders of the Muslim world, culturally, economically and politically. A move like this would push Muslim-countries governments to rally behind other countries, rather than Saudi Arabia, could be Turkey or Pakistan for instance.
There is also a credibility problem. Saudi officials have made it clear that normalization requires an “irreversible guarantee” to a Palestinian Statehood – not just a vague commitment, not a rhetorical gesture, but a clear binding process with time-bound benchmarks. Prime Minister Benjamin Netanyahu’s coalition, dominated by far-right parties that openly oppose Palestinian statehood, cannot deliver that. Even if Netanyahu personally wanted to, his government would likely collapse before any agreement could be signed. It is never an easy choice for any of them.
As a result, there are three factors which make a pre-2029 deal especially improbable. First, Israeli domestic politics. Any Israeli government that could accept a Palestinian state does not currently exist. The next Israeli election, whenever it comes, would need to produce a fundamentally different coalition, one willing to make territorial and political concessions that the current leadership totally rejects.
Second, Saudi domestic and regional constraints. The kingdom’s legitimacy rests partly on its religious standing. Normalizing with Israel while Gaza remains in ruins and the West Bank faces ongoing settlement expansion would expose Riyadh to charges of “betrayal” across the Muslim world. MBS has spent years consolidating power; he will not risk that for a deal that can wait. This is if we already assume the Saudi Arabia is interested in a non-complete Peace Deal in the first place.
Third, the Palestinian issue has no off-ramp. Unlike trade or security cooperation, which can proceed quietly, full normalization requires a public, irreversible step. The Saudis understand that once they recognize Israel, their leverage on behalf of the Palestinians and who ever supports them, will simply evaporates. The kingdom wants to use that card to try and solve the problem once and for all. Once it’s played, it’s gone.
However, none of the above obstacles means normalization will never happen. The strategic logic remains powerful. Israel wants recognition; Saudi Arabia wants security and economic transformation; the United States wants a regional order that excludes Iran and China. But the sequencing is wrong. Riyadh has learned that it can secure many of the tangible benefits -such as defense cooperation, nuclear technology, advanced weapons- without formalizing ties with Israel. The Palestinian question, meanwhile, has become much more urgent, not less. Therefore, basic compilations remain but there is a big chance they will be softened by the arrival of 2029.
A deal before 2029 would require a new “moderate” Israeli government willing to accept Palestinian Statehood, a Gaza reconstruction process that satisfies Arab and Saudi publics, and a US administration willing to invest serious political and economic capital in a two-state solution. None of those conditions exist till this very day. The Peace Deal is not dead, it is simply waiting for a Middle East that has not yet arrived.
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