U.S. tells Israel mega-deal with Saudis must include concessions to Palestinians

The Biden administration told the Israeli government last week that it would have to make significant concessions to the Palestinians as part of any possible mega-deal with Saudi Arabia that includes normalization between the kingdom and Israel, four U.S. officials and a source briefed on the issue told Axios.

Why it matters: Reaching a deal that includes a Saudi-Israel peace agreement will be a historic foreign policy achievement for President Biden. The administration is pushing to get an agreement before the end of the first quarter of next year, when the presidential campaign is expected to consume Biden’s agenda.

• But the Biden administration faces an uphill battle. Israeli Prime Minister Benjamin Netanyahu has strong reservations about taking any significant steps toward the Palestinians. Doing so would likely anger the extreme-right parties that are part of his coalition and risk bringing down his government.

Behind the scenes: Ron Dermer, Israel’s minister of strategic affairs, visited Washington last week for talks at the White House and the State Department about the Saudi Arabia mega-deal.

• Four current and former U.S. officials told Axios both White House national security adviser Jake Sullivan and Secretary of State Tony Blinken raised with Dermer the need for Israeli concessions for the Palestinians as part of any Saudi deal.

Blinken told Dermer that the Israeli government is “misreading the situation” if it thinks it won’t have to make any such concessions, two U.S. officials said.

• Blinken also said that Saudi Arabia will need to show the Arab and Muslim world that it got significant deliverables from Israel regarding the Palestinians in return for a normalization agreement, the officials said.
• A White House National Security Council spokesperson said they don’t comment on private diplomatic talks. The State Department deferred to the White House.
• Dermer’s office and the Israeli Prime Minister’s Office did not respond to requests for comment.

The big picture: Sullivan also told Dermer that Biden wants to get broad support from congressional Democrats for a mega-deal with Saudi Arabia, a source briefed on the issue told Axios. To do that, Sullivan said, there will need to be serious Israeli steps toward the Palestinians.

• Many Senate Democrats who will have to vote on parts of any mega-deal are highly critical of the Saudi or Israeli government or both.

The other side: Dermer in his conversations with Blinken and Sullivan wasn’t very forthcoming about possible Israeli concessions for the Palestinians, according to two U.S. officials and a source briefed on the issue.

• Dermer told Sullivan that Israel’s concession is that it is ready to accept a civilian nuclear program in Saudi Arabia, the source briefed on the issue said.

State of play: Sullivan said in a briefing with reporters on Tuesday that “there are still ways to travel” to get a mega-deal.

• Several outstanding issues remain, including a possible defense treaty between Washington and Riyadh and possible U.S. support for a civilian nuclear program that would include uranium enrichment on Saudi soil.

What to watch: Three current and former U.S. officials said Netanyahu could be invited to the White House for a meeting with Biden the third week of September. The Biden administration hasn’t confirmed if or when a White House meeting between Biden and Netanyahu will take place.

• A source briefed on the issue said that such a meeting would likely focus on stressing the need for Israel to make concessions to the Palestinians in any future normalization deal with Saudi Arabia.