Arab nations develop plan to end Israel-Hamas war and create Palestinian state

Deal would establish formal ties between Israel and Saudi Arabia

Andrew England, Middle East editor/Finantial Times

Arab states are working on an initiative to secure a ceasefire and the release of hostages in Gaza as part of a broader plan that could offer Israel a normalisation of relations if it agreed to “irreversible” steps towards the creation of a Palestinian state.

A senior Arab official said they hoped to present the plan — which could include the prize of Saudi Arabia formalising ties with Israel — within a few weeks in an effort to end the Israel-Hamas war and prevent a wider conflict erupting in the Middle East.

Arab officials have discussed the plan with the US and European governments. It would include western nations agreeing to formally recognise a Palestinian state, or supporting the Palestinians being granted full membership of the UN.

“The real issue is you need hope for Palestinians, it can’t just be economic benefits or removal of symbols of occupation,” the senior official said.

The initiative comes as Israel faces mounting international pressure to end its offensive in besieged Gaza, with the US stepping up diplomatic efforts to prevent a broader conflagration and pushing for a longer term resolution to the protracted Israeli-Palestinian conflict.

US secretary of state Antony Blinken on Wednesday described the war in Gaza as “gut wrenching”, adding that what was needed was a Palestinian state “that gives people what they want and works with Israel to be effective”.

When Saudi foreign minister Prince Faisal bin Farhan was asked on Tuesday if Riyadh would recognise Israel as part of a wider political agreement, he said “certainly”.

“We agree that regional peace includes peace for Israel, but that could only happen through peace for the Palestinians through a Palestinian state,” he told a panel at the World Economic Forum in Davos.

Later on Tuesday, US national security adviser Jake Sullivan said Washington remained focused on securing an agreement that led to Saudi Arabia normalising relations with Israel as part of its plans for the postwar era.

“Our approach is and remains focused on moving towards greater integration and stability in the region,” Sullivan said in Davos.

But there are multiple challenges to securing a deal with Israel.

After Hamas’s October 7 attack killed at least 1,200 people, Israeli officials warned that the war in Gaza would last months, while Benjamin Netanyahu has ruled out working with the western-backed Palestinian Authority and rejects a two-state solution.

In December, the Israeli prime minister said he was “proud” that he had prevented the establishment of a Palestinian state, saying “everyone understands what would have happened if we had capitulated to international pressures and enabled a state like that”.

Netanyahu presides over the most far-right government in Israel’s history, which includes religious Zionist settlers who openly call for the annexation of the West Bank.

“Given the Israeli body politic today, normalisation is maybe what can bring Israelis off the cliff,” the senior Arab official said.

Saudi Arabia was edging closer to establishing diplomatic relations with Israel before Hamas’s October 7 attack in return for the US agreeing to a security pact with Riyadh and supporting the development of the kingdom’s nuclear ambitions.

US and Saudi officials were also discussing a Palestinian element to the deal that included freezing the expansion of Israeli settlements in the West Bank, boosting support for the Palestinian Authority that administers limited parts of the occupied territory, and establishing a pathway towards a two-state solution.

Before the war erupted, Blinken had been scheduled to visit Riyadh in mid-October to discuss the plans for the Palestinians. Hamas’s attack and Israel’s response in Gaza upended that process.

But Saudi Arabia made it clear that while the process was stalled, the kingdom had not taken the option off the table. There was also the realisation that Riyadh would have to secure greater concessions from Israel for the Palestinians, including in Gaza, with more concrete steps towards the creation of a Palestinian state.

“We had already got an outline from the PA,” a person briefed on the talks said. “Now that element has to be strengthened for it to be politically viable at any point in the future.”

Since October 7, the Biden administration — Israel’s staunchest backer — has repeatedly spoken of the need for a two-state solution as the only option to ultimately provide the security the Jewish state desires.

Saudi Arabia’s willingness to consider normalising relations potentially provides an important bargaining chip with Israel, which has considered diplomatic relations with the kingdom the grand prize in its efforts to develop ties with Arab states. The oil-rich kingdom stands out as a leader of the Sunni Muslim world and custodian of Islam’s two holiest sites.

Saudi Crown Prince Mohammed bin Salman, the nation’s day-to-day leader, was keen to normalise ties with Israel as he drives an ambitious programme to develop the conservative kingdom into a finance, trade and tourism hub. Now, like other Arab states, Riyadh is worried about the risk of the Israel-Hamas war causing a regional conflagration that spills over borders, as well as the danger that the devastation in Gaza radicalises a new generation of young Arabs.

The Saudi leadership has expressed outrage at Israel’s offensive in Gaza, which has killed more than 24,000 people, according to Palestinian health officials, raised the risk of famine in the strip, and reduced swaths of the enclave to rubble-strewn wastelands. It has repeatedly joined calls for an immediate ceasefire in Gaza.

Blinken said on Wednesday it was up to Israel to “seize the opportunity that we believe is there,” saying the crisis was “an inflection point” for the Middle East that requires hard decisions.