Smotrich: Israel won’t accept Saudi normalization if it includes a Palestinian state

Israel will reject any normalisation agreement with Saudi Arabia if it requires the creation of a Palestinian state, Israeli Finance Minister Bezalel Smotrich said yesterday.

Speaking to Bloomberg, the extreme far-right minister said: “If that’s a dealbreaker, the deal will sink.”

Last year, Tel Aviv and Riyadh had been deeply involved in talks to normalise relations, in a process backed by Washington and hailed as a potential massive shift in the region.

Following numerous delays and disagreements, however, the talks finally fell through after Israel launched a renewed campaign of bombardment on Gaza and a military invasion of the besieged Strip, which has been described as a genocide by Amnesty Interantional.

Smotrich told Bloomberg that he believes the incoming Trump administration “understands the obligation to ensure the future existence of Israel” by rejecting the two-state solution.

According to the Times of Israel, this stance contrasts with the Biden administration and international efforts, which support empowering the Palestinian Authority (PA) to eventually govern Gaza after the war.

Smotrich and Prime Minister Benjamin Netanyahu oppose strengthening the PA, equating it to Hamas. Instead, Netanyahu has suggested that Arab countries like Saudi Arabia and the UAE could help administer Gaza post-war. However, regional nations have consistently refused to participate in Gaza’s reconstruction or governance without the PA’s involvement.

On the West Bank, Smotrich confirmed to Bloomberg that approximately 160,000 Palestinians barred from jobs in Israel since October 2023 will not be allowed to return. Bank of Israel Governor Amir Yaron has warned about economic fallout from this decision, particularly in Israel’s construction sector, but Smotrich defended the move as a necessary short-term sacrifice for long-term gains, claiming it would lead to better building technologies and productivity.

Despite recent downgrades to Israel’s credit rating by major agencies, Smotrich insisted the economy remains strong. He pointed to a recent eight per cent rise in the shekel against the dollar and dismissed the concerns of the International Monetary Fund (IMF) and credit rating agencies as a misunderstanding of Israel’s economic strength.

“The economy’s working much better than might have been expected,” he argued.

Israel launched a genocidal war on the Gaza Strip in October 2023, killing over 44,700 Palestinians so far, most of them women and children, and injuring nearly 106,000.

Last month, the International Criminal Court (ICC) issued arrest warrants for Israeli Prime Minister Benjamin Netanyahu and former Defence Minister Yoav Gallant for war crimes and crimes against humanity in Gaza.

Israel also faces a genocide case at the International Court of Justice (ICJ) for its deadly war on Gaza.

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