The Biden Administration Aims for a Diplomatic Agreement in the Coming Months Aimed at Persuading Israeli Prime Minister Benjamin Netanyahu to Engage in a New Commitment to a Palestinian State, in Exchange for Diplomatic Recognition by Riyadh, According to US and Saudi Officials. As an Incentive for Recognizing Israel, the White House is Offering Riyadh a More Formal Defense Relationship with Washington, Support for the Acquisition of Civil Nuclear Energy, and a Renewed Push for a Palestinian State – a Package that US Officials Say is in the Final Stages of Negotiation.

For President Biden, the initiative presents the opportunity for a significant diplomatic breakthrough in a presidential election year that would expand upon the Abraham Accords, which his Republican opponent Donald Trump had sealed during his term. These agreements led to the normalization of relations between Israel and the United Arab Emirates, Bahrain, and Morocco.

However, Netanyahu's conviction to hold talks on the establishment of a Palestinian state remains a difficult hurdle. Right-wing members of his government and a large part of the Israeli public are against a state following the deadly attack on Southern Israel on the 7th of October, say US and Israeli officials.

Saudi Arabia has long declared that a Palestinian state is a priority, and its top diplomats have said that creating a pathway to a two-state solution is part of their price for normalization. Now, Saudi officials have privately hinted to the US that they might accept Israel's verbal assurances to enter new talks about a Palestinian state in order to secure other parts of the deal that are of greater interest to Riyadh, said Saudi officials.

A deal mediated by the USA could also offer Israel a potential exit strategy from Gaza once this conflict is over, said Saudi officials. The USA has outlined a post-war plan that would involve troops from Arab states to secure Gaza.

Several potential Arab contributors, however, say they would not consider participation without Israel's public steps towards the establishment of a Palestinian state.

If the United States signs an agreement with Riyadh but Israel rejects supporting a Palestinian state, a high-ranking US official could deliver a speech outlining the benefits Israel could receive if it accepts the diplomatic package, according to an idea being discussed within the Biden administration.