Saudi Arabia's crown prince said in a published interview that Israelis are entitled to live peacefully on their own land, another public sign of an apparent thawing in ties between the two countries.
Asked if he believes the Jewish people have a right to a nation state in at least part of their ancestral homeland, Mohammed bin Salman was quoted by US magazine The Atlantic as saying:
"I believe the Palestinians and the Israelis have the right to have their own land. But we have to have a peace agreement to assure the stability for everyone and to have normal relations."
Saudi Arabia - birthplace of Islam and site of its holiest shrines - does not officially recognise Israel. It has maintained for years that normalizing relations hinges on an Israeli withdrawal from Arab lands captured in the 1967 Middle East war - territory Palestinians seek for a future state.
"We have religious concerns about the fate of the holy mosque in Jerusalem and about the rights of the Palestinian people. This is what we have. We don't have any objection against any other people," said Prince Mohammed, who is touring the United States to drum up investments and support for his efforts to contain Iranian influence.
Increased tension between Tehran and Riyadh has fuelled speculation that shared interests may push Saudi Arabia and Israel to work together against what they regard as a common Iranian threat.
"There are a lot of interests we share with Israel and if there is peace, there would be a lot of interest between Israel and the Gulf Cooperation Council countries," Prince Mohammed added.
The German foreign ministry welcomed his comments and ministry officials underscored the Saudi role in pushing for an Arab peace initiative as early as 2002.
"The prince's comments are very close to the position of Germany and the EU: We need a two-state solution and serious negotiations to achieve that," said one ministry official. "Israelis and Palestinians have a right to peaceful lives in their own country."
Israeli-Palestinian peace talks envisaging a Palestinian state alongside Israel have been frozen since 2014.
Saudi Arabia opened its air space for the first time to a commercial flight to Israel last month, which an Israeli official hailed as historic following two years of efforts.
In November, an Israeli cabinet member disclosed covert contacts with Saudi Arabia, a rare acknowledgment of long-rumoured secret dealings which Riyadh still denies.
Saudi Arabia condemned US President Donald Trump's move to recognise Jerusalem as the capital of Israel last year. But Arab officials told Reuters at the time that Riyadh appears to be on board with a broader US strategy for an Israeli-Palestinian peace plan still in its early phases of development.
