A Saudi ambassador said this week that his country will normalize relations with Israel only if there is a two-state solution between the Israelis and Palestinians.
Analysts say a chief goal of U.S. President Joe Biden's administration has been the normalization of ties between Israel and Saudi Arabia, after Israel established ties with the United Arab Emirates and Bahrain in 2020 as part of the Abraham Accords.
Saudi Ambassador to Britain Prince Khalid bin Bandar told BBC Radio 4 that the kingdom has wanted peace with Israel since the Arab peace initiative of 2002 but not at "the cost of the Palestinian people."
"We've been at this for a long time and willing to accept Israel for a long time," he said, but "we can't live with Israel without a Palestinian state."
Before the Gaza war, Bandar said, the Saudis "were close to normalization, therefore close to a Palestinian state," emphasizing that "one doesn't come without the other."
Analyst Nicholas Heras of the Washington-based New Lines Institute said, "The Saudi price [for recognition] has risen."
The question is: Will Israeli Prime Minister Benjamin Netanayhu accept the establishment of a Palestinian state?
Heras said that Saudi youth make up a big part of de facto ruler Crown Prince Mohammad bin Salman's constituency, and that youth have been strong supporters of the Palestinian cause.
"It's very clear now that there's incredible frustration in the Gulf, including among the Emiratis, Bahrainis and others, with Netanyahu himself," Heras said. "They had cut a deal. The Abraham Accords is an example of taking a risk on Netanyahu, and they are now feeling the chance they took may have been the wrong one."
Heras said the far-right policies adopted by the Netanyahu coalition, such as "doubling down on the idea that there won't ever be a Palestinian state, talk about expanding settlements in the West Bank [and] creating new settlements in Gaza," are causing anxiety not only among Arab states but in Washington, too.
Writing on the Axios web news site, Israeli journalist Barak Ravid said, "The demands from Saudi Arabia align with those from the Biden administration," citing discussions U.S. Secretary of State Antony Blinken had with Israeli leaders this week.
Ravid wrote that Blinken also made it clear "Saudi Arabia and other Arab countries won't get involved in day-after solutions for Gaza - mainly reconstruction - without a path to a future Palestinian state."
"If Netanyahu gets on board, he could potentially get a historic peace deal under his name," Ravid wrote. "But if he doesn't, he is likely to be left on his own to take care of the crisis in Gaza."