Get the latest market trends in your inbox

Stay on top of the latest market trends and economic insights with the Axios Markets newsletter. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Minneapolis-St. Paul

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa-St. Petersburg news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa-St. Petersburg

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Israeli Prime Minister Netanyahu; Saudi King Salman. Photo: Ronen Zvulun/AFP/Getty Images; Mikhail Svetlov/Getty Images

A classified Israeli Foreign Ministry report — circulated in mid-December among top Israeli government national security and foreign policy officials — determined that Saudi Arabia will not support the Trump administration's Middle East peace plan and won't normalize relations with Israel unless the Israeli government makes a substantive concession to the Palestinians, officials who have read the report told me.

Why it matters: The report contradicts the public line from Prime Minister Benjamin Netanyahu, who is also Israel's foreign minister. Over the past year, Netanyahu has claimed that Israel can normalize relations with Gulf nations, including Saudi Arabia, despite the Palestinian issue.

Details: The report was written by analysts from the Foreign Ministry's Political Research Center and was classified "secret" because it deals with the highly sensitive issue of Saudi-Israeli relations. The report was sent to a small group of ambassadors and national security officials in the Israeli government.

  • A Foreign Ministry official who read the report told me it said that Saudi Arabia's King Salman had taken back the Israeli-Palestinian file from his son, Crown Prince Mohammed bin Salman.
  • It stresses that Salman rolled Saudi policy on the issue back to the kingdom's traditional alignment with the Arab Peace Initiative, which states that normalization of relations with Israel will only happen after the formation of a Palestinian state.

What they're saying: The Foreign Ministry official told me, "There was a feeling in the last year that there was a window of opportunity to reach a breakthrough with Saudi Arabia — but even if there was such an opening, this window is closed for now."

  • Former U.S. officials who were briefed on the Jan. 14 meeting between Secretary of State Mike Pompeo and Salman in Riyadh told me that the Saudi king's messages only strengthened the report's conclusion.
  • They said Salman stressed to Pompeo that Saudi Arabia will not support the Trump administration's peace plan if it doesn't address Palestinian demands — mainly regarding a capital in East Jerusalem. 

Go deeper: Israel worried pressure over Khashoggi killing will destabilize Saudi Arabia

Go deeper

40 mins ago - World

Hong Kong media tycoon Jimmy Lai detained on fraud charge

An activist holds a placard highlighting China's Tiananmen Square massacre as pro-democracy media tycoon Jimmy Lai arrives at West Kowloon Magistrates' Court in Hong Kong in November. Photo: Isaac Wong/SOPA Images/LightRocket via Getty Images

Hong Kong media tycoon Jimmy Lai is being detained until an April court hearing after the pro-democracy supporter was charged Thursday with fraud, per his Apple Daily news outlet.

Why it matters: His arrest and denial of bail is another blow for the pro-democracy movement in the former British colony amid concerns about a fresh crackdown on activists.

4 hours ago - Politics & Policy

Inhofe loudly sets Trump straight on defense bill

Sen. Jim Inhofe speaks with reporters in the Capitol last month. Photo: Samuel Corum/Getty Images

Senator Jim Inhofe told President Trump today he'll likely fail to get two big wishes in pending defense spending legislation, bellowing into his cellphone: "This is the only chance to get our bill passed," a source who overheard part of their conversation tells Axios.

Why it matters: Republicans are ready to test whether Trump's threats of vetoing the bill, which has passed every year for more than half a century, are empty.

Conspiracy theories blow back on Trump's White House

Sidney Powell. Photo: Tom Williams/CQ-Roll Call, Inc via Getty Images

President Trump has rarely met a conspiracy theory he doesn't like, but he and other Republicans now worry the wild tales told by lawyers Sidney Powell and Lin Wood may cost them in Georgia's Senate special elections.

Why it matters: The two are telling Georgians not to vote for Republicans David Perdue and Kelly Loeffler because of a bizarre, baseless and potentially self-defeating theory: It's not worth voting because the Chinese Communist Party has rigged the voting machines.