The source claimed that the Netanyahu government had rejected "conciliatory gestures" towards the Palestinians and acceptance of the demands of the right wing bloc undermined any possibility of rapprochement with the Palestinians and Saudi Arabia itself.
The Israeli leadership is "at a loss" over Riyadh's decision to halt any negotiations with Washington on normalizing relations, the source added.
On Friday, US Secretary of State Antony Blinken said that normalization of relations between Israel and Saudi Arabia was possible but not a certainty.
The US launched a process to normalize relations between Israel and the Arab states in 2020. As a result of these efforts, in September 2020, Israel, the United Arab Emirates and Bahrain signed a set of documents known as the Abraham Accords, and were joined by Morocco in December of that year. In January 2021, Sudan also signed the declaratory section of the Accords, but did not sign the corresponding document with Israel, unlike the other states, due to disagreements between the Sudanese military and civilian leadership over the issue. By 2020, Israel had diplomatic relations with only two Arab countries in the region, Jordan and Egypt.