In the lead-up to President Joe Biden’s trip to Israel, the West Bank, and Saudi Arabia, there was an overwhelming amount of speculation in Israel about just how far normalization between Israel and Saudi Arabia was set to progress. While few predicted that full diplomatic ties were imminent, the rumors ran the gamut from granting of overflight rights to Israeli Ministry of Defense or IDF officials traveling with Biden from Tel Aviv to Jeddah. The Palestinians were expected to end up swallowing a number of bitter pills and having their expectations dashed, while the Israelis were expected to walk away with significant forward movement along the path toward full regional integration.
Instead, it was Israel whose expectations required tempering. While Israel received a warm embrace from Biden—including the Jerusalem Declaration, laying out American security and strategic guarantees to Israel without much of anything in return—the reception from Saudi Arabia was notably chilly. Israeli airlines will now be able to fly through Saudi airspace as anticipated, but the kingdom went out of its way to not treat this as a concession to Israel, instead portraying it as a move to open up its skies to all international civil aviation and explicitly denying any links to normalization. A hoped-for announcement about direct flights for Arab Israelis wanting to make the hajj pilgrimage did not materialize, and no Israeli official traveled with Biden or has been invited as a follow-up. Saudi Arabia also publicly threw cold water on plans for the integrated air defense system touted by Biden and in recent months by Israeli Defense Minister Benny Gantz, with the Saudi foreign minister denying that any talks at the GCC conference took place on including Israel in joint defense initiatives. Biden and Israeli Prime Minister Yair Lapid ended up in the awkward position of thanking Saudi leaders for steps toward Israel that Saudi leaders then denied that they had made.
It is tempting to read into this dynamic the reemergence of the Israeli-Palestinian conflict as a critical factor. Saudi Arabia took multiple opportunities to reiterate that the creation of an independent Palestinian state is a precursor to normalizing relations with Israel and to insist that the Arab Peace Initiative—in which normalized relations with Israel would only follow a successful Israeli-Palestinian final status agreement establishing a Palestinian state with a capital in East Jerusalem—remains Saudi policy. While the Palestinian issue has always been and remains a factor for Saudi Arabia, it is not the primary reason for the awkward gap between Israeli expectations in recent weeks with regard to Saudi Arabia and the actual result. The gap is more attributable to differences over how to confront Iran, where despite the confluence of interests that has pushed Israel and the wider region closer together, Israel remains an outlier in its level of hawkishness.
Arab states are convinced that the U.S. has withdrawn from the Middle East and will continue to do so, a pattern they have perceived since the Obama administration continuing uninterrupted across administrations of both parties. While it is hard to find fans of the JCPOA in the region, it is also hard to find anyone outside of Israel—and increasingly hard inside of Israel as well—who believes that the American withdrawal from the JCPOA was paired with a willingness to confront Iran militarily and prevent its nuclearization. Those who support a return to the JCPOA as the lesser of two bad options do not think that it will come with an invigorated American effort to counter Iran’s non-nuclear regional mischief. Saudi Arabia, the Abraham Accords states, and the rest of the non-Abraham Accords states in the status quo Sunni camp do not view the U.S. presence or American ambitions as an effective counterweight to Iran, nor do they view Israel as an effective replacement for the U.S. In short, if the U.S. strategy in the Middle East is offshore balancing, the region isn’t buying it.
This combines with a difference in threat perceptions of Iran between Israel and Arab states. Neither Israel nor its current and potential future diplomatic partners want to see a nuclear Iran or a militarily and economically resurgent Iran, but Israel stands alone in viewing Iran as an existential threat. The gap in threat perceptions between the U.S. and Israel has been the cause of decades of disagreement between the two countries on Iran policy, and the Sunni states stand somewhere on the spectrum between the U.S. and Israel. The Saudis and the Emiratis have been on the receiving end of Iranian missile and drone attacks, and Bahrain lives its life in the shadow of Iranian naval threats, but all of them believe to varying extents that Iran can be managed. Israel does not, and that creates a difficulty for Israeli policies that are simultaneously pushing for stronger confrontation of Iran and stronger relationships throughout the region, as it views these two as going hand in hand, while the rest of the region sees dangers for themselves in the Israeli approach.
Israel wants to drive a wedge between Iran and Sunni states, but Sunni states are hedging their bets through bandwagoning with Iran. It is why Saudi Arabia and Iran continue to hold rounds of talks aimed at resolving their differences. It is why the UAE just last week announced its intention to send an ambassador to Iran and specifically rejected the idea of a Middle Eastern version of NATO whose purpose would be to confront Iran. Israel unambiguously views increasing pressure on and confrontation with Iran as the only way to solve its Iranian problem, whereas other states in the region are willing to co-opt Iran as necessary and adopt plausible deniability of more hawkish American and Israeli actions while privately cheering them on. It does not mean that these states are moving into the Iranian camp, but it does mean that public gestures toward Israel that appear squarely aimed at isolating Iran are less appealing to them than they are to Jerusalem.
For all of the exuberance about potential Israeli-Saudi normalization—which I expect is coming at some point in the post-King Salman era—it is not here yet, and the Palestinian component is not the only reason why. Israel’s appetite for building an open alliance against Iran is not shared by its regional security partners, and Saudi Arabia in particular is engaged in a delicate tightrope act in being unsure as to the best way to prevent further Iranian-sponsored attacks on its oil facilities and shipping in the Persian Gulf. For now, that tightrope act includes keeping Israel at arm’s length, and nobody should be surprised to see Israel’s enthusiasm about new regional alliances and defense mechanisms outstrip its ability to orchestrate them just yet.
Ottomans and Zionists 
I agree the idea of a Mideast version of NATO is optimistic. Forming such an alliance will take more than a few drone attacks by Iran, but an all out war. Though I highly doubt some of these countries would survive if left to their own merits, and I doubt the US or Europe would be keen on Iran controlling the majority of the gulf’s oil reserves.
Both that “Iranian Wall” (including Hezb’ullah, of course) and that “Palestinian Wall” are being buttressed by the Biden Administration.