Shafaq News / Saudi Arabia is putting U.S.-backed plans to normalise ties with Israel on ice, two sources familiar with Riyadh's thinking said, signalling a rapid rethinking of its foreign policy priorities as war escalates between Israel and Palestinian group Hamas.

The conflict has also pushed the kingdom to engage with Iran. Saudi Crown Prince Mohammed bin Salman took his first phone call from Iranian President Ebrahim Raisi as Riyadh tries to prevent a broader surge in violence across the region.

The two sources told Reuters there would be a delay in the U.S.-backed talks on normalisation with Israel that was a key step for the kingdom to secure what Riyadh considers the real prize of a U.S. defence pact in exchange.

Until Iran-backed Hamas sparked a war on Oct. 7 by launching a devastating attack on Israel, both Israeli and Saudi leaders had been saying they were moving steadily towards a deal that could have reshaped the Middle East.

Saudi Arabia, birthplace of Islam and home to its two holiest sites, had until the latest conflict indicated it would not allow its pursuit of a U.S. defence pact be derailed even if Israel did not offer significant concessions to the Palestinians in the their bid for statehood, sources had previously said.

But an approach that sidelined Palestinians would risk angering Arabs around the region, as Arab news outlets broadcast images of Palestinians killed in Israeli retaliatory airstrikes.

Hamas fighters killed more than 1,300 Israelis in their Oct. 7 attack and more than 1,500 had been killed by Friday in Israel's ongoing strikes on Gaza in response.

The first source familiar with Riyadh's thinking said talks could not be continued for now and the issue of Israeli concessions for the Palestinians would need to be a bigger priority when discussions resumed - a comment that indicates Riyadh has not abandoned the idea.

(Reuters)