Biden’s Grand Bargain to Remake the Middle East

The election-year gamble is a long shot.

By Amy Mackinnon and Robbie Gramer, FP.

The Biden administration is laying the groundwork for an ambitious grand bargain that would tie rapprochement between Israel and Saudi Arabia to substantial steps toward Palestinian statehood, according to nine analysts and former U.S. government officials familiar with the plans. The long-shot diplomatic gamble could remake the Middle East and define U.S. President Joe Biden’s foreign-policy legacy, but it faces staggering challenges that many fear will be insurmountable.

The plan the administration is working on builds on preexisting efforts to strike a U.S.-Saudi defense pact, a top Saudi foreign-policy priority. In exchange, Saudi Arabia, the most influential Gulf Arab state, would establish diplomatic relations with Israel, with all parties agreeing to forge irreversible steps toward Palestinian statehood.

Despite Israel’s punishing war in Gaza, which has drawn widespread condemnation across the Arab world and beyond, Saudi officials never renounced efforts toward normalization. Officials in Washington still see it as the best way to shake up the intractable status quo in a region where decades of U.S.-led peace efforts have failed to bring tensions between Israelis and Palestinians to an end or create a functional, sovereign Palestinian state.

Brett McGurk, Biden’s top White House Middle East aide, is spearheading the effort, according to those familiar with the talks, with the administration set to announce the proposed plan in the spring.

Diplomatic efforts on the issue were challenging before the war, and they have been exponentially complicated by both the Oct. 7, 2023, Hamas attack, which left Israeli society deeply traumatized, and Israel’s brutal offensive in the Gaza Strip, which has killed more than 28,000 Palestinians, according to the Hamas-run Gaza Health Ministry.

“It’s like you’re trying to complete a Rubik’s Cube while running 100 miles an hour and sinking in quicksand,” Frank Lowenstein, who served as a U.S. special envoy for Israeli-Palestinian negotiations during the Obama administration, said of the diplomatic push. “The degree of difficulty on that is just through the roof.”

The challenges were evident last week as U.S. Secretary of State Antony Blinken made his fifth visit to the region since the start of the war as part of a multistage diplomatic push by the United States to secure a cease-fire in Gaza and the release of Israeli hostages as well as broker a wider deal to diffuse tensions in the region.

The visit came as Hamas issued its response to a prospective cease-fire deal, which had been crafted by U.S., Egyptian, Israeli, and Qatari officials and presented to the group late last month. Blinken described the militant group’s demands as containing some “non-starters” while noting that there was space for further negotiations. Israeli Prime Minister Benjamin Netanyahu described Hamas’s proposed terms as “delusional.” Blinken ultimately came back to Washington without having secured a deal.

A moment when the turmoil wrought by Hamas’s attack and Israel’s response has reverberated across the Middle East may seem like an unlikely time for ambitious diplomacy. And analysts and former U.S. officials underscored that no one deal is likely to bring decades of conflict to a close. But some experts say the fact that this crisis is engulfing the region is precisely why now is a good time to try.

“Everything is so chaotic. There’s an opportunity to do one grand bargain,” said Joel Braunold, the managing director of the Washington-based S. Daniel Abraham Center for Middle East Peace.

A key element absent from previous peace efforts is the interest of the Gulf Arab states, which have increasingly come to see normalizing ties with Israel as being in their own economic and security interests. “That’s the new factor here,” said Dennis Ross, who spearheaded U.S. Middle East peace efforts during the George H.W. Bush and Clinton administrations.

The United Arab Emirates and Bahrain have already signed normalization agreements with Israel as part of the Trump administration-facilitated Abraham Accords. Qatar has emerged in recent years as a significant diplomatic broker, maintaining ties with Hamas’s political wing as well as the United States, and has been central to negotiations over the release of Israeli hostages from Gaza.

The promise of normalization with Saudi Arabia would further reduce Israel’s isolation in the Arab world and potentially give Riyadh powerful leverage over Israel to secure concessions for the Palestinians, at least in theory.

Both Saudi Arabia and the United States are highly motivated to get a deal done quickly ahead of the U.S. presidential election in November. A deal would represent a major diplomatic victory for a president whose foreign-policy record has been plagued by crisis management from Afghanistan to Ukraine to the Middle East. For its part, Saudi Arabia is keen to see a defense pact with the United States make it through the Senate while the Democrats hold the gavel, and Republican Sen. Lindsey Graham has promised to secure the additional votes needed to reach the two-thirds majority required for ratification of such an agreement, according to NBC News.

All the same, the path to clinching the deal is precarious. Biden’s relationship with Saudi Crown Prince Mohammed bin Salman is complicated. On the 2020 presidential campaign trail, then-candidate Biden described the Middle Eastern country as a “pariah” state over the brutal murder of Washington Post columnist Jamal Khashoggi, and once in office, Biden put long-standing U.S.-Saudi ties under review.

Now that the United States has done a complete about-face and seems eager for a deal, Riyadh is likely to try to exact a steep price from Washington in exchange for normalizing ties with Israel. In a statement issued this month, the Saudi Foreign Ministry said that there “will be no diplomatic relations with Israel unless an independent Palestinian state is recognized on the 1967 borders with East Jerusalem as its capital.”

Foreign Policy reached out to the Saudi Embassy in Washington for comment but did not receive an immediate response.

Relations between the Biden administration and Netanyahu’s government have also become increasingly fraught. Washington is dealing with the farthest-right government in Israeli history, led by a prime minister who has long opposed the creation of a Palestinian state.

But “this is not just a Netanyahu issue—this is an Israeli issue,” said Michael Makovsky, the head of the Jewish Institute for National Security of America. “After Oct. 7, their whole sense of what they need for their own security has completely changed.” The Oct. 7 Hamas attack on Israel, considered the worst massacre of Jews in a single day since the Holocaust, sent shockwaves through Israeli society and caused tectonic shifts in the Israeli public’s views on Palestinian statehood: 65 percent of Israelis oppose a two-state solution, while only 25 percent support it, recent polls show—a complete reversal of where Israelis stood a decade ago.

Foreign Policy contacted the Israeli Embassy in Washington for an interview for this piece but was not granted one.

It’s also unclear what the Palestinians would get out of such a deal. The United Nations, Arab leaders, and Blinken have all called for irreversible steps toward Palestinian statehood, but U.S. officials have yet to publicly outline what that would entail—and how to make such measures irrevocable. The Biden administration is realistic that full Palestinian statehood remains a distant prospect but is looking into options that could at least help lay the groundwork for a two-state solution, such as land transfers or an agreement on East Jerusalem. Part of that reportedly involves the State Department exploring options for what a “demilitarized” Palestinian state would look like, though that could be a non-starter for the Palestinian side.

Then there’s the matter of who from the Palestinian side would negotiate any path to statehood. The primary political entities that the United States could conceivably negotiate with—the Palestinian Authority and PLO—are “ossified and have lost most of their legitimacy,” said Khaled Elgindy, a senior fellow at the Middle East Institute. “The PLO barely exists, and the PA is dysfunctional, divided, weak, and deeply unpopular among Palestinians.” Meanwhile, wartime polls show Hamas has gained support among Palestinians in both Gaza and the West Bank.

The Biden administration has spoken of plans to help revitalize the PA, but here, too, it has been light on details on what that plan actually entails. “There needs to be massive internal reforms before you could even negotiate a final outcome because you need a leadership that has the legitimacy and the mandate to negotiate these existential issues with Israel,” Elgindy said. “This is one of the main reasons why all the previous negotiations have failed.”

In the United States, Biden is facing what promises to be a bruising presidential election campaign against former President Donald Trump with the Israel-Hamas war playing an outsized role in the election cycle. Progressive Democrats have criticized Biden for being too lenient with Israel, while Republicans have rebuked him for not going far enough to support Israel and punish Iran and its regional proxy groups.

Congress, meanwhile, is hobbled with partisan infighting and has yet to pass a major national security supplemental bill that includes billions of dollars in funding for Israel. Both Saudi Arabia and Israeli-Palestinian issues have been highly politically charged in Congress in the past. Any new deal could require congressional buy-in, through either funding or a Senate approval of a new defense pact with Saudi Arabia.

Clinching any final deal, let alone one during an election year with one of the most dysfunctional Congresses in modern history, could prove to be an impossible task, especially on an expedited timeline ahead of the U.S. elections. “The idea that this whole deal would be signed, sealed, and delivered within the next three or four months, I just don’t understand how the math works on that,” Lowenstein said. A more feasible alternative, he said, would be for Biden to announce just the parameters of a grand bargain as a road map in the spring. “That, at least to me, feels relatively feasible.”

But if the risks of failure are high, the rewards from the slim chance of success are even higher, administration insiders say—and it’s a chance that Biden administration officials say they can’t let fall by the wayside.

Some of the most consequential diplomatic breakthroughs in the Middle East came on the backs of war, including the 1978 Camp David Accords that cemented relations between Israel and Egypt after the 1973 war and the 1993 Oslo Accords that effectively set up a vision for a two-state solution after the First Intifada from 1987 to 1993.

“We remain determined as well to pursue a diplomatic path to a just and lasting peace and security for all in the region,” Blinken said during his trip to the region, including a “concrete, time-bound, irreversible path to a Palestinian state.”