Saudi-Israel relations in the balance amid Trump’s $1 trillion investment push

Sunday 11 May 2025 - 12:35

By: Zahouani Ilham

Saudi-Israel relations in the balance amid Trump’s $1 trillion investment push

As U.S. President Donald Trump arrives in Riyadh on Tuesday, he is set to receive a lavish reception, marking the start of a visit centered around a potential $1 trillion in investments. However, the ongoing conflict in Gaza has complicated one of Trump's key foreign policy objectives: the normalization of relations between Saudi Arabia and Israel. Saudi officials have expressed that any progress on this front is contingent on Israel agreeing to a ceasefire, which is one of Saudi Arabia's primary conditions for restarting talks, according to Gulf and U.S. sources.

Steve Witkoff, Trump's Middle East envoy, recently hinted at upcoming advancements in expanding the Abraham Accords, a series of agreements that have already seen Arab nations like the UAE, Bahrain, Sudan, and Morocco establish diplomatic ties with Israel. However, Israeli Prime Minister Netanyahu’s opposition to halting the Gaza conflict or establishing a Palestinian state has made it challenging to advance normalization talks with Saudi Arabia.

Saudi Arabia, which does not officially recognize Israel, sees the matter of normalization as increasingly contentious since the start of the Gaza war. This issue has become separated from broader U.S.-Saudi discussions, focusing instead on economic and security matters. Saudi Crown Prince Mohammed bin Salman has made it clear that he requires a resolution to the Gaza conflict and a clear path toward Palestinian statehood before considering further engagement with Israel.

Despite this, Trump’s trip will emphasize strengthening U.S.-Saudi economic ties, with both sides aiming to finalize major investment deals in sectors like arms, infrastructure, and AI. The visit represents an opportunity to showcase Trump’s focus on creating jobs and bolstering the U.S. economy, with a particular emphasis on securing substantial investments from Saudi Arabia.

A pivotal element of the trip is Trump's attempt to secure a defense pact with Saudi Arabia and address the civil nuclear program talks. These talks, however, have been impacted by regional instability, particularly in Gaza. Trump’s administration also seeks to counterbalance China’s growing influence in the Gulf region, which has been advancing rapidly with investments and economic collaboration, especially within Saudi Arabia’s Vision 2030.