By Matt Spetalnick, Humeyra Pamuk and Simon Lewis
WASHINGTON (Reuters) -Until last weekend, the Biden administration was counting on the Middle East to remain relatively calm while it quietly pursued its main policy goals there: brokering Israeli-Saudi detente and containing Iran's nuclear ambitions.
Those hopes were shattered when Palestinian Hamas militants infiltrated from Gaza and rampaged through Israeli towns on Saturday, killing hundreds and abducting scores more. Israeli forces have retaliated by pounding the coastal enclave, killing hundreds and imposing a total blockade there.
After keeping the intractable Israeli-Palestinian conflict at arm's length, President Joe Biden now finds himself thrust into a crisis likely to reshape his Middle East policy, and into an uneasy alliance with far-right Israeli Prime Minister Benjamin Netanyahu. He is dispatching U.S. Secretary of State Antony Blinken to meet with Israeli leaders this week in a show of support.
It is a politically risky situation for a president seeking re-election in 2024, one that could have significant implications for world oil prices and pull U.S. resources and attention away from what until now has been his defining foreign policy challenge - Russia's war in Ukraine.
The surprise attack by Hamas, designated a terrorist group by the United States, has dealt a blow to Biden's efforts to broker a landmark normalization deal between Israel and Saudi Arabia and complicated Washington's approach toward Iran, Hamas' longtime benefactor.
While U.S. officials say that their bid to establish ties between longtime foes Israel and Saudi Arabia can survive the crisis, many experts take a more pessimistic view.
“Quite simply, all efforts at normalization are on hold for the foreseeable future,” said Jon Alterman, head of the Middle East program at the Center for Strategic and International Studies, contradicting the official U.S. government line.
Bringing together Washington’s two most powerful allies in the region was seen in the U.S. administration as a way to bolster a bulwark against Tehran and counter China's inroads in the oil-rich Gulf.
White House spokesman John Kirby (NYSE:KEX) told reporters he would not go so far as to say normalization talks had been paused or were on the back burner but that Washington’s focus for now was on helping Israel defend itself.
Jonathan Panikoff, the U.S. government’s former deputy national intelligence officer on the Middle East, said “the Arab street is not going to be supportive of normalization after an extended war in which Israeli strikes destroy much of Gaza.”
Echoing that sentiment, a source familiar with Saudi thinking said it would be difficult to "talk normalization during another Arab-Israeli war."
The crisis has also stirred criticism of the Biden administration's Israeli-Saudi diplomatic effort for what has been widely seen as setting aside the Palestinians' quest for statehood.
Khaled Elgindy, a former Palestinian negotiations adviser, accused the U.S. of leading a normalization process that bypassed the Palestinians.
“That sort of neglect is part of why we're seeing what we're seeing,” said Elgindy, now at the Middle East Institute.
Hamas was in part delivering a message that the Palestinians could not be ignored if Israel wanted security and that any Saudi deal would slam the brakes on the kingdom’s recent rapprochement with Iran, according to Palestinian officials and a regional source.
U.S. officials have said the time was not right to attempt a resumption of long-suspended Israeli-Palestinian negotiations, due largely to the intransigence of both sides.
Longer-term, Riyadh might return to the negotiating table for U.S. security guarantees to safeguard against Iran, Panikoff said.
The Biden administration - even while helping Israel battle Hamas and free scores of hostages, including Americans – could try to craft a strategy to keep alive the option of Palestinian statehood, analysts say.
But Netanyahu, who has already resisted compromises with the Palestinians sought by both Washington and Riyadh, will be loath to make concessions, given the rising death toll and the hostage crisis he faces.
WHITE HOUSE CAUGHT OFF GUARD
“The Middle East region is quieter today than it has been in two decades,” U.S. national security adviser Jake Sullivan said a little more than a week ago at a conference, signaling the administration could focus more on priorities such as the Ukraine conflict and China’s growing clout in the Indo-Pacific.
Biden’s aides who had been driving the effort to normalize Israeli-Saudi ties, in return for a U.S. defense pact that Riyadh is seeking, were caught off guard by the Hamas onslaught, U.S. officials said. The initiative was already being questioned in Congress, largely because of the Saudis’ human rights record.
The Hamas assault is already drawing the administration into deeper engagement in the volatile Middle East, with Biden promising to rush additional military assistance to Israel and deter any entity from exploiting the situation.
At the White House, Biden spoke of the "pure unadulterated evil" unleashed by Hamas and described in graphic detail atrocities committed against Israelis. "We stand with Israel," he vowed.
The immediate challenge is preventing the war from spiraling into a regional conflict, administration officials say, especially preventing the Iran-backed Lebanese group Hezbollah from opening a second front on Israel's northern border.
Biden aides since have been disappointed by the Saudis’ failure to denounce the Hamas attack, a U.S. official said.
The United States pressed for Saudi condemnation, most likely in a phone call between Secretary of State Antony Blinken and Prince Faisal bin Farhan, but the Saudi foreign minister pushed back, according to the source familiar with Saudi thinking.
"Saudi is not close to Hamas, but they cannot ignore how Israel blockaded Gaza for years and what they have been doing in the West Bank," the source told Reuters.
By contrast, the United Arab Emirates, which along with Gulf neighbor Bahrain recognized Israel in 2020 under a deal brokered by the Trump administration called the Abraham Accords, labeled the Hamas attack a “grave escalation."
Citing mutual national interests, Ebtesam Al Ketbi, the president of Abu Dhabi-based think tank Emirates Policy Centre, said the two Arab states' budding relations with Israel had “endured previous rounds of conflict between Israelis and Palestinians and they will probably endure the current one.”
AN EMBOLDENED IRAN?
In the wake of the attack, the U.S. may also be forced to review its approach to Iran, which lauded the Hamas assault but denied a direct role.
Since taking office, Biden's policy toward the Islamic Republic has been marked by a failed effort to negotiate a return to the Iran nuclear deal. Tehran denies seeking a nuclear weapon.
U.S. officials said Iran was complicit in the attack because of its longstanding support for Hamas but they had no evidence directly implicating Tehran.
Iran could be emboldened to step up its “shadow war” with Israel after seeing a militant raid pierce the Israeli military’s reputation of invincibility, and use its regional proxies to target U.S. interests in the region, analysts said.
“Iran may be less deterred nowadays, rightly or not, because it views the administration as less willing to engage in a military conflict or take actions that risk one,” said Panikoff, now at the Atlantic Council think tank.
Biden has also had to fend off Republican criticism of last month’s prisoner swap with Iran, which U.S. officials suggested could be a confidence-building step for further discussions, and the unfreezing of $6 billion in Iranian funds restricted to humanitarian purposes.