Will Israel and Saudi Arabia normalize relations during Trump's term?
Normalization is unlikely before January 20, 2029 because Saudi Arabia’s non-negotiable conditions—Netanyahu’s removal and an irreversible Palestinian statehood pathway—remain unmet under the current Israeli government, and Israel’s October 2026 election outcome is pivotal with Netanyahu’s likely re-election collapsing the deal.
Analysis
Israel and Saudi Arabia have not normalized relations as of July 2026, with talks frozen due to Saudi Arabia’s strict conditions requiring Benjamin Netanyahu’s removal after Israel’s October 2026 elections and a reversal of settlement policies, which Netanyahu’s far-right government is unlikely to accept. Saudi officials insist normalization cannot proceed without an irreversible pathway to Palestinian statehood, a demand Netanyahu has flatly rejected. The sudden death of Senator Lindsey Graham in mid-July 2026 removes the primary architect of the diplomatic surge planned immediately after the October elections, creating a leadership vacuum that undermines the momentum needed to secure a deal before the new Congress convenes in January 2027.
The timeline hinges critically on Israel’s October 2026 election. If Netanyahu wins re-election, Saudi conditions collapse and normalization remains frozen through 2029. Even if a new government forms, it must embrace the two-state solution and cancel Smotrich and Ben-Gvir’s settlement measures, which remains uncertain given Israel’s political landscape. While Iran’s weakening post-conflict creates a strategic opening for trilateral cooperation, political hurdles regarding leadership and Palestinian concessions remain the primary blockers.
The market currently prices the Yes outcome at 32%, slightly higher than my independent 28% assessment. This modest overpricing likely reflects optimism about Trump’s potential diplomatic leverage or Kushner’s behind-the-scenes efforts with the Palestinian Authority, but these factors cannot overcome Saudi Arabia’s unequivocal, non-negotiable conditions without a change in Israeli leadership and policy. The market may be underweighting the probability of Netanyahu’s re-election and the structural impossibility of meeting Saudi demands under his current government.
Arguments
For
- Saudi Arabia has signaled willingness to resume Abraham Accords discussions if significant Israeli concessions are made
- Iran’s weakening post-conflict creates a strategic opening for trilateral security and diplomatic arrangements
- Jared Kushner is working behind the scenes to establish communication between Trump and the Palestinian Authority to support a deal
- A Saudi royal source believes normalization could occur before end of October 2026 if a new Israeli government accepts the two-state principle
Against
- Saudi Arabia explicitly requires Netanyahu’s removal after October 2026 elections, which is unlikely if he wins re-election
- Netanyahu has flatly rejected demands for a public commitment to Palestinian statehood, a core Saudi condition
- Normalization is frozen until Israel forms a new government that reverses Smotrich and Ben-Gvir’s settlement policies
- Senator Lindsey Graham’s death removes the architect of the planned diplomatic surge, creating uncertainty about strategy survival
Key drivers
- Outcome of Israel’s October 2026 election and whether Netanyahu remains prime minister
- Saudi Arabia’s non-negotiable requirement for an irreversible pathway to Palestinian statehood
- Leadership vacuum following Senator Lindsey Graham’s death and its impact on diplomatic momentum
- Reversal of settlement expansion policies in Judea and Samaria by a future Israeli government
Risk factors
- Netanyahu’s unexpected re-election in October 2026, which would collapse Saudi conditions
- Failure of any new Israeli government to accept the two-state solution or cancel settlement policies
- Lack of a successor to Lindsey Graham’s diplomatic strategy to bridge gaps before January 2027
- Escalation of Gaza conflict or regional instability preventing domestic Saudi justification for normalization
Scenarios
Best case
Netanyahu loses the October 2026 election, a new Israeli government forms that embraces the two-state solution and cancels settlement policies, and a successor to Graham secures a deal before January 2027, enabling normalization before Trump’s term ends.
Most likely
Netanyahu wins re-election or a new government forms but fails to meet Saudi conditions on Palestinian statehood and settlements, leaving talks frozen through 2028 with normalization unlikely before Trump’s term ends.
Worst case
Netanyahu wins re-election in October 2026, Saudi conditions collapse, talks remain frozen indefinitely, and no credible pathway to Palestinian statehood emerges, ensuring normalization does not occur before January 20, 2029.
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