US says Israel-Saudi normalisation needs Gaza quiet, talks on Palestinian rule

By Dan Williams

JERUSALEM (Reuters) -Forging formal Israeli-Saudi relations as part of an emerging trilateral deal involving Washington would require a calming of the Gaza war and a discussion of prospects for Palestinian governance, the U.S. envoy to Jerusalem said on Tuesday.

"There's going to have to be some period of quiet, I think, in Gaza, and there's going to have to be a conversation about how do you deal with the question of the future of Palestinian governance," ambassador Jack Lew said.

"My view is, that strategic benefit is worth taking the risk of getting into that conversation about. But that's a decision that the government of Israel will have to make and the people of Israel will have to make," he told a conference hosted by the Israel Democracy Institute (IDI) think-tank.

The United States on Monday described as "near final" a bilateral defence pact with Saudi Arabia. Once completed, it would be part of a broad deal presented to Israeli Prime Minister Benjamin Netanyahu to decide whether to make concessions to secure a normalisation of ties with Riyadh.

Netanyahu has long promoted such a diplomatic prize. But, seven months into a war with Hamas militants in the Gaza Strip whom Israel has sworn to eradicate, a ceasefire is elusive and he says it is premature to discuss day-after Palestinian rule.

"Of course we want to expand the circle of peace. We haven't been shy about this," Israeli government spokesperson Tal Heinrich said. "(But) any peace initiative that jeopardises Israel's security is not something that we see as real peace."

Addressing the IDI event separately, Israeli President Isaac Herzog, whose role is largely ceremonial, argued that bilateral ties with Saudi Arabia would be a setback to Iranian-backed Hamas, which sparked the war with an Oct. 7 cross-border rampage.

"I very much hope that this possibility is being seriously considered, as the empire of evil sought on October 7 to destroy the chance for normalisation," Herzog said.

"Our struggle, in the end, is not only a fight against Hamas. It is a wider, strategic, global and historic battle, and we must do everything to integrate into the grand vision of normalisation."

The Netanyahu government, however, has said a failure to defeat Hamas could harm Israeli credibility in the eyes of U.S.-aligned Arab Sunni powers, which worry about Islamist militancy.

(Writing by Dan Williams; Editing by Sharon Singleton)