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It is far too early to make bold pronouncements on what a second Trump administration portends for U.S. policy across a region as complicated as the Middle East. Still, one part of that conflict-ridden region stands out as more promising than the rest and has already drawn President-elect Donald Trump’s attention. Indeed, the Gulf’s the thing. For a president whose policies and approach to international affairs proved opportunistic, ad hoc, and transactional, it offers much: kings, crown princes, and emirs who offer flattery, money, hydrocarbons, future business opportunities, and perhaps even a Nobel Peace Prize.
During his first term, Trump and his son-in-law Jared Kushner played a key role in brokering the Abraham Accords—the administration’s signal foreign-policy success, enriching themselves and the Trump Organization in the process. And both would love to see a sequel whose main event is an Israeli-Saudi normalization agreement. It’s a heavy lift, especially in the wake of the Oct. 7, 2023, Hamas attack on Israel and the subsequent war, which have changed the region drastically. And it will require some hard choices. But we suspect that Trump is almost certainly going to try.
It is far too early to make bold pronouncements on what a second Trump administration portends for U.S. policy across a region as complicated as the Middle East. Still, one part of that conflict-ridden region stands out as more promising than the rest and has already drawn President-elect Donald Trump’s attention. Indeed, the Gulf’s the thing. For a president whose policies and approach to international affairs proved opportunistic, ad hoc, and transactional, it offers much: kings, crown princes, and emirs who offer flattery, money, hydrocarbons, future business opportunities, and perhaps even a Nobel Peace Prize.
During his first term, Trump and his son-in-law Jared Kushner played a key role in brokering the Abraham Accords—the administration’s signal foreign-policy success, enriching themselves and the Trump Organization in the process. And both would love to see a sequel whose main event is an Israeli-Saudi normalization agreement. It’s a heavy lift, especially in the wake of the Oct. 7, 2023, Hamas attack on Israel and the subsequent war, which have changed the region drastically. And it will require some hard choices. But we suspect that Trump is almost certainly going to try.
Trump doesn’t like messes, not to mention the prospect of throwing good money after bad. And in many ways, the Middle East today is one big mess. The region is hardly a land of opportunity and is more often than not a place where U.S. ideas go to die. Five Arab states are in varying degrees of dysfunction and failure—Lebanon, Syria, Iraq, Yemen, and Libya. Ongoing conflicts in Gaza and Lebanon, alongside escalating tensions between Israel and Iran, can at best be managed and at worst sap U.S. resources without much prospect of a return on investment. Trump’s America First view of the world doesn’t leave much room for expanding a whole range of new commitments. Indeed, his determination to withdraw U.S. forces from Syria during his first term suggests he’d just as soon have the United States head for the exits and abandon any number of deployments during his second.
But the Gulf states are different. They survived the Arab Spring barely scathed. Stability and the kind of strongman autocracy that Trump admires made working with the Gulf leaders an easier task. And the influence of a son-in-law with deep pro-Israeli sensibilities, who saw both financial opportunities in courting Gulf authoritarians and the possibility of broadening Israel’s ties with the Arab world, sealed the deal. This strategy centered not on a two-state solution with the Palestinians but instead on a 22-state solution—pushing for diplomatic relations between Israel and all the Arab countries, particularly key Gulf states. After all, what other U.S. president ever made Saudi Arabia the first stop on his first trip abroad?
Then, of course, there was the money. Not only would Kushner succeed in using his relationships forged during Trump 1.0 to set up his hedge fund, Affinity Partners, with an estimated $2 billion from Saudi Crown Prince Mohammed bin Salman’s coffers, but there were and are ongoing business deals bound to be conflicts of interest during Trump 2.0, where the national interest, at a minimum, is entangled with Trump’s financial interests. Trump Towers and other luxury real estate deals are planned for Saudi Arabia, the United Arab Emirates, and Oman. In July, the Trump Organization and DarGlobal announced plans to develop a luxury tower in Jeddah, Saudi Arabia. “We are thrilled to expand our footprint in the Middle East and bring the Trump standard of luxury to the region through our long-standing relationship with Dar Global,” executive Eric Trump said about the project.
The Middle East looks different today than it did when Trump left office four years ago. In Israel, Prime Minister Benjamin Netanyahu presides over the most extreme right-wing government in Israel’s history. He needs to maintain this coalition to avoid losing power and beat his ongoing trial for bribery, fraud, and breach of trust. As a result, nearly every security calculation and foreign-policy decision in Israel is inextricably tied to his political survival. This is doubly true for his policy in Gaza, where any deal to free hostages would mean releasing large numbers of Palestinian prisoners, a compromise that will almost certainly collapse his coalition. Thus, the war there will go on, and with no security force to maintain order, Israel will operate in Gaza for months to come.
The West Bank remains a powder keg, and his two extremist ministers continue to carry out policies that are avowedly annexationist. Recently, Finance Minister Bezalel Smotrich called 2025 “the year of sovereignty in Judea and Samaria,” Israel’s term for the West Bank. In Lebanon, prospects for a cease-fire between Israel and Hezbollah have improved. But even if a deal is reached, there are no guarantees that it can endure. Meanwhile, Israeli-Iranian tensions have increased as each side has struck the other’s territory twice openly and directly. Iran continues its enrichment activity and has now emerged definitively as a nuclear weapons threshold state. At the same time, the long, dark shadow of Oct. 7 hangs over the Israeli and Palestinian publics, cloaking them in suffering and trauma. Whatever hope existed pre-Oct. 7 for a pathway toward regional peace and Palestinian statehood—ever elusive—has all but disappeared beneath the rubble of Gaza, the massive loss of Palestinian civilian lives, and the ongoing misery and pain of hostages held by Hamas. The space for dealmaking has seemingly all but disappeared.
One of the ironies in the Biden-Trump transition is that the outgoing administration has done a good deal of the spade work on preparing an Israeli-Saudi deal. Any Israeli-Saudi normalization agreement rests on three pillars: a bilateral U.S.-Saudi deal, a bilateral Israeli-Saudi accord, and a third piece tethering the arrangements on normalization to a commitment to a two-state solution to accommodate Palestinians.
The Biden administration had been working on a bilateral package of incentives to sweeten the normalization agreement, reportedly including a U.S. security guarantee along the lines of the U.S.-Japan treaty (short of a NATO-style Article 5 commitment); the export of U.S. nuclear technology (including allowing Riyadh to control its own fuel cycle under intrusive U.S. monitoring); Saudi assurances on preventing China’s influence in the kingdom (particularly cooperation on military and technology); and a Saudi commitment to maintain the dollar as the reserve currency for the sale of hydrocarbons. The logic behind these concessions seemed to be to tether Saudi Arabia to the U.S. sphere: simultaneously blocking China’s influence, creating a putative Israel-Sunni bloc to counter Iran, and counteracting Saudi Arabia’s pursuit of a 360-degree foreign policy that saw the kingdom moving closer to China, Russia, and engaging in a detente with Iran.
Why the United States should have to pay such a high price for an Israeli-Saudi normalization accord (the last time Washington extended a security guarantee to any country was the 1960 revision of the U.S.-Japan treaty) seemed beyond the point. And allowing the Saudis to evade signing a 123 Agreement that would prevent their ability to control the nuclear fuel cycle, a violation of U.S. nonproliferation policy, seemed a risky concession. Nonetheless, this was the price the Biden administration seemed willing to pay. And at a minimum, this package is what Mohammed bin Salman would expect from any administration interested in getting Saudi Arabia involved in a normalization accord with Israel.
Arriving at an Israeli-Saudi deal will be far more challenging than the Abraham Accords, not to mention the additional barrier of securing Senate ratification for a U.S. security guarantee. But nowhere will Trump face more challenges than in the region itself.
Trump’s first step should be ensuring regional de-escalation. It’s impossible to see the Saudis going for a deal while the war in Gaza continues and the humanitarian situation still worsens, and public support in Israel is equally unlikely without a resolution to the hostage crisis. Simultaneously, it is vital that any Israel-Hezbollah cease-fire endures. Even more critically, Israeli-Iranian tensions need to be managed. Saudi Arabia, detente with Iran notwithstanding, may still see Iran as an existential threat. At the same time, Mohammed bin Salman has no intention of leading a Sunni coalition against Iran. Nor will he welcome a major Israeli-Iranian confrontation that could easily extend to attacks on Saudi Arabia.
It is unclear how Saudi Arabia and Iran would manage their own relationship if an Israeli-Saudi deal appears likely, particularly given Tehran’s opposition. As Mohammed bin Salman hopes to bring trade, growth, and tourism to Saudi Arabia, he fears regional escalation and will do everything in his power to make sure the kingdom is not in the line of fire. The Trump administration will have to make tough choices with regards to Iran, but any hope of a deal between Israel and Saudi Arabia will require a downshifting of tensions between Iran and Israel. What we can’t predict now is whether Trump would try to reach a diplomatic agreement with Iran on the nuclear issue in a sort of Trump version of the Joint Comprehensive Plan of Action.
The most complicated piece of the Israeli-Saudi puzzle, and the greatest barrier to normalization, is the Palestinian question. Even before Oct. 7, the Saudis would have had a hard time cozying up to the Israelis without some meaningful linkage to Palestinian statehood, despite Mohammed bin Salman’s inclination to ditch the Palestinians. He’s not yet king, and his father, King Salman, has a much more traditional view of supporting the Palestinian cause.
After Oct. 7, the calculus has shifted. The devastation in Gaza, both to the civilian population and critical infrastructure—combined with serious talk in Israel of annexing the West Bank—has made getting token and symbolic gestures from Israel on the matter of Palestinian statehood no longer an option. In September, Mohammed bin Salman made Saudi views pretty clear: “The kingdom will not stop its tireless work toward the establishment of an independent Palestinian state with East Jerusalem as its capital, and we affirm that the kingdom will not establish diplomatic relations with Israel without that.” Still, the lead-up to the Abraham Accords could provide an instructive lesson: The UAE agreed to sign the agreement in return for Netanyahu nixing his annexationist plan. Of all the external actors who might conceivably put brakes on annexation, the Saudis are at the top of the list. But this time round, Riyadh would need to attain something much more meaningful for the Palestinians rather than just averting something negative.
Even if some clever formulation could be worked out to create a substantial pathway to statehood, the odds that the current Israeli government would accept it are slim to none. In the unlikely event that Netanyahu pivots to peacemaker, he could expand his government, ditch Smotrich and National Security Minister Itamar Ben-Gvir, and bring in centrists, allowing Israel’s flexibility to expand. But Netanyahu today sees no reason to take that risk, bringing in parties that don’t like or trust him for an agreement with Saudi Arabia that, while important, is not nearly as important as staying in power and out of prison.
The recent decision by the International Criminal Court to issue arrest warrants for Netanyahu and others will only harden his determination to stay in power. Right now, he’s riding high and might actually manage to stay prime minister until the government goes to term in 2026. Nor is it all that certain that the Israeli public is prepared to support serious negotiations on Palestinian statehood in the wake of Oct. 7. The odds would perhaps improve if statehood were linked to a serious regional peace with the Arab world. But Israelis would also need a Palestinian leader who had the power to unify the Palestinian national movement and to deliver what Israel wants most—security.
It remains to be seen how Trump will be able to square the Palestinian, Saudi, and Israeli circles on Palestinian statehood. As the self-styled “greatest hostage negotiator,” one can imagine Trump falling back on his 2020 “Peace to Prosperity” plan, which he presented at the White House alongside Netanyahu. While the plan lacked input from the Palestinians (President Mahmoud Abbas dismissed it as “nonsense”), it was the first detailed plan presented by a U.S. president since Bill Clinton.
As a starting point, the plan envisions no population transfers, leaving settlers living in the West Bank in their homes. It uses all the right buzzwords—state, capital, Jerusalem, self-determination—but at its core is still a basis but not an endpoint for negotiations. Likely, in its current form, it would be rejected by the current Israeli government, Palestinians everywhere, and the Arab world. If there were a real possibility of a deal, would Trump be willing to pressure Netanyahu to substantially improve what Israel would be willing to offer the Palestinians? How much pressure would he be willing to bring? Indeed, if a deal craters because of Netanyahu’s obstruction, it could have severe consequences for the Netanyahu-Trump relationship.
We can see the Trump administration refloating it to encourage the Israelis and Palestinians to put their own plans on the table. Still, it’s likely to remain dead on arrival. Far better, but much less likely, would be an administration that goes back to the drawing board and articulates a vision that’s tethered less to wishful thinking and more to uncomfortable realities. The vision might articulate meaningful statehood as an aspiration but suggest practical pathways over time that would rebuild confidence and trust between Israelis and Palestinians, bolstered by key Arab states and the international community.
Nobody ever lost money betting against Arab-Israeli peace. Based on Trump 1.0, his other governing priorities, the sheer magnitude of the lift to make Israeli-Saudi normalization a reality, and the appointments he has made so far to work the issue, one could be forgiven for betting against peace. But who knows? Sprinkle a little fairy dust here and there, promise the Israelis this and the Saudis that, keep them guessing, and behave unpredictably, and you never know what might turn up. It is the holy land after all. And miracles do happen.