Gaza conflict puts region on edge again
26 December 2023

For much of 2023, the defining narrative for the Middle East was one of reconciliation. From Iran and Saudi Arabia agreeing to rekindle diplomatic relations under a China-brokered deal in March, and Syria’s President Bashar al-Assad being welcomed to an Arab League summit in Riyadh in May, leaders favoured diplomacy over division.
Not all wounds healed, but even in Yemen an unofficial truce between Houthi rebels and Saudi-backed forces largely held throughout the year.
The Hamas assault on Israel on 7 October and Israel’s response dramatically altered the picture, although whether it will lead to lasting regional change remains to be seen.
Prior to the fighting, few minds in the region were focused on the Palestinian issue, with far more attention being paid to developing commercial and security ties. Saudi Arabia was widely thought to be edging closer to normalisation with Israel, with Israeli ministers starting to visit the kingdom regularly.
Israel’s Communications Minister Shlomo Karhi was in Riyadh on 1 October for a conference. Tourism Minister Haim Katz visited for a World Tourism Organisation event a week earlier.
Such trips are now off the agenda, with Riyadh focused on leading the Islamic world in condemning Israel. On 11 November, it hosted a joint summit of the Arab League and the Organisation of Islamic Cooperation. Among the attendees was Iran’s President Ebrahim Raisi – the first visit by an Iranian president to Saudi Arabia since 2012. Raisi used the occasion to invite Crown Prince Mohammed bin Salman al-Saud to visit Tehran, a sign that the pre-war trend for reconciliatory diplomacy has not entirely disappeared.
The Gaza conflict has been particularly difficult to navigate for Abraham Accord signatories Bahrain, Morocco and the UAE. Bahrain suspended economic ties with Israel, but there has been no sign from any of the three of wanting to break off relations altogether.
“How far the war goes will determine how the relationship [with Israel] develops,” said one analyst.
Some other diplomatic gains are also being made against the backdrop of the war. Qatari Prime Minister Sheikh Mohammed bin Abdulrahman al-Thani travelled to Manama on 17 November as part of an energetic diplomatic push to bring the Israeli/Palestinian war to an end.
Sheikh Mohammed held talks with Prime Minister and Crown Prince Salman bin Hamad al-Khalifa, and they agreed to revive long-abandoned plans to build a ‘friendship bridge’ between the countries.
Navigating the multi-polar world will remain a key challenge for Gulf powers in the year ahead
Another trend evident in recent years has also continued – namely the efforts by some Gulf powers to dilute their ties with Western allies and build stronger links with China, Russia and others.
A clear sign of this came in August when the UAE and Saudi Arabia were invited to join the Brics grouping of major non-Western economies. They are set to formally join in January.
But in an indication of their desire to maintain links with all sides, Saudi Arabia and the UAE then signed up to the India-Middle East-Europe Economic Corridor (Imec) initiative at the G20 summit in New Delhi, India, in mid-September.
Navigating the increasingly multi-polar world will remain a key challenge for Gulf powers in the year ahead.
Imminent peril
In other parts of the region, the situation holds more immediate peril. In Egypt, the economy is in a parlous state, with President Abdul Fattah al-Sisi relying on Gulf allies to prop up an economy facing over $29bn of debt repayments in 2024.
Neighbouring Libya remains divided between rival administrations with their own regional allies. Turkiye and Qatar have supported the Tripoli-based government of Prime Minister Abdulhamid al-Dbeibah, while Egypt, Saudi Arabia and the UAE back General Khalifa Haftar and his Libyan National Army in the east.
In Sudan, the UAE-backed Rapid Support Forces (RSF) have been fighting President General Abdel-Fattah Burhan’s Sudanese Armed Forces in a vicious civil war since April. Peace talks in Riyadh in late September failed to deliver a ceasefire, and the UAE has been implicated in the delivery of weapons to the RSF.
Tunisia is quieter, but the economy is in a delicate state and the lurch towards authoritarian dictatorship under President Kais Saied is making observers nervous.
Tensions between Algeria and Morocco are also problematic. The two countries have long been at odds over Western Sahara, but relations have become more strained in recent years, with Algiers severing diplomatic ties in 2021. Algerian coast guards killed two Moroccans in August 2023 when they strayed into Algerian waters on their jet skis – an incident that could have readily escalated.
In Iraq, political disagreements came to the fore in November when the Supreme Court removed parliamentary speaker Mohammed al-Halbousi – the country’s most powerful Sunni politician – from office. Iran-backed Iraqi militias have also been flexing their muscle since the Gaza war, launching dozens of attacks on US forces in the country.
Other Iraqi court rulings have also caused disquiet, particularly a September decision by the Constitutional Court to annul a bilateral treaty on sharing the Khor Abdullah waterway with Kuwait.
Iran meanwhile weathered the protests that erupted in the wake of Marsa Amini’s death in September 2022. Tehran’s emerging challenge is in managing the response of its regional allies to the Gaza conflict. The actions of its other allies
in the region – including the Houthis in Yemen and Hezbollah in Lebanon – could set the tone for the whole region in the year ahead.
Image: Smoke rises after Israeli air strikes on the city of Rafah in the southern Gaza Strip on 10 October 2023
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Oman begins procurement for truck road PPP2 July 2026

Oman’s Ministry of Transport, Communications & Information Technology (MTCIT) has tendered a contract for the sultanate’s second public-private partnership (PPP) road scheme.
The project spans 66 kilometres between Al-Buraimi and Al-Dhahirah governorates, starting at the Al-Khatm border crossing in Mahdah and ending at the Al-Fath area in Dhank.
Under the scheme, the winning bidder will design, build, finance and transfer the project, which is specially designed for heavy vehicles.
MTCIT issued the tender on 30 June. The deadline to purchase tender documents is 11 August, and the clarification period will run from 11 to 18 August.
The bid submission deadline is 30 January 2027.
In August 2023, Oman shortlisted five of the eight prequalified teams to compete for the Salalah-Thumrait truck road (STTR) project, the sultanate’s first PPP road project.
The project failed to materialise beyond that point.
In January, MEED reported that Oman is planning to establish a new commercial railway line to transport essential supplies between Salalah and Thumrait – an initiative understood to have preceded the STTR project. The railway is planned to be implemented as a PPP.
The scheme comprises the construction of a railway line approximately 150-170km long. Two main stations are planned: Salalah Station, near the port and food storage facilities, and Thumrait Station, which will serve as a distribution hub for the surrounding areas.
Trains are expected to be equipped with refrigerated and dry containers. The scheme aims to reduce transport costs between the two areas by 20%-30%, and Oman plans to pitch the project to major food companies to secure long-term transport contracts.
The proposed project timeline is:
- 2025: Conduct economic, technical and environmental feasibility studies
- 2026: Launch the project for investment on a PPP basis
- 2027-30: Construction of the railway line
- 2031: Trial operations
- 2032: Full commercial operations
The project is touted as a key initiative under Oman Vision 2040, which aims to transform the sultanate into a global logistics hub.
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Acwa signs Mauritania gas IPP agreements2 July 2026
Saudi Arabia’s Acwa has announced it has signed the public-private partnership (PPP) and power-purchase agreements for the 230MW N’diago combined-cycle gas turbine (CCGT) power plant in Nouakchott, Mauritania.
The agreements cover the development, financing, construction and operation of the project. They were signed in Nouakchott in the presence of senior officials from the Mauritanian government and Acwa chairman Mohammad Abunayyan.
The project is Mauritania’s first large-scale gas-fired independent power project (IPP). It is also expected to be the country’s first major gas-fired power plant procured through a PPP structure.
The CCGT plant will provide 230MW of baseload generation capacity. It will use Mauritania’s domestic natural gas resources to supply the national grid.
Separately, Mauritanian Electricity Company (Somelec) has been advancing procurement for the construction of a 50MW solar power and battery energy storage system IPP project. It issued an expression of interest request in May.
Mauritania currently has several wind and solar power projects in the early study stages, according to regional project tracker MEED Projects.
There are also plans to build a 1,200MW wind power plant near Port Etienne in the Bay Province of Nouadhibou, for which China Energy Engineering was appointed as the main contractor in 2024.
Meanwhile, Acwa’s portfolio comprises 111 assets that are operational, under construction or in advanced development. These represent investments of SR468.9bn ($125bn).
According to the company, it has a power generation capacity of 98GW, including 52.3GW of renewable energy, and manages 9.7 million cubic metres a day of desalinated water globally.
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Saudi water sector awaits next catalyst2 July 2026
Commentary
Mark Dowdall
Power & water editorSaudi Arabia’s water sector is entering a critical period as developers and investors wait for the next signal that the kingdom’s project pipeline is moving forward.
Seven months have passed since preferred bidders were announced for the Arana and Hadda independent sewage treatment plant (ISTP) projects, which together will provide 350,000 cubic metres a day (cm/d) of treatment capacity. The projects had been expected to reach financial close in the second quarter of this year, but have yet to do so.
In parallel, Saudi Arabia’s Vision Invest was selected as preferred bidder last December for the estimated $2bn Riyadh-Qassim independent water transmission pipeline (IWTP) project. It was reported at the time that the company had submitted a levelised tariff of SR2.627 ($0.70) a cubic metre, almost 20% below the next nearest bid. The project, which will comprise an 859-kilometre pipeline with transmission capacity of 685,000 cm/d, had been tipped to reach financial close this quarter.
The uncertainty extends beyond projects awaiting financial close. The developer tender bid deadline was recently pushed back again for the $150m Riyadh East ISTP. Meanwhile, Saudi Arabia’s Water Transmission Company (WTCO) is understood to be reviewing the delivery model for the Jubail-Buraidah and Ras Mohaisen-Baha-Mecca independent water transmission system (IWTS) projects.
According to sources familiar with the plans, WTCO is considering establishing a special purpose vehicle that would take equity stakes in both schemes. This could further delay procurement for a project that has already seen multiple deadline extensions. Sharakat’s next wave of independent water projects (IWPs) is also in the pipeline. The first of these is not expected to be tendered until early 2027.
According to regional project tracker MEED Projects, Saudi Arabia’s water infrastructure sector recorded $3.14bn-worth of awards in the first half of this year, substantially lower than the $7.58bn recorded during the same period in 2025.
While activity has slowed, the longer-term outlook remains unchanged. Population growth and industrial expansion continue to drive demand for desalination, wastewater treatment and water transmission infrastructure. In the meantime, key stakeholders are looking for the next clear signal that the project pipeline is regaining momentum.
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Contractor wins Jeddah road expansion deal in Riyadh2 July 2026

The Royal Commission for Riyadh City (RCRC) has awarded a contract for the Jeddah Road Development Project in Riyadh.
Local construction firm Saudi Pan Kingdom (Sapac) won the contract.
Spanning 29 kilometres, the scheme includes 14 bridges and five lanes.
Designed to handle up to 353,000 vehicles a day, the road is expected to be completed by 2028, with mobilisation works already under way.
The project forms part of the third package of the RCRC’s Riyadh Main and Ring Road Axes Development Programme, which was announced in January.
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> Thumamah Road Development Project: The eastern section of the project will span 8km and include three bridges and three tunnels, linking the northern and eastern parts of Riyadh. The project will have a daily capacity of up to 200,000 vehicles.
> King Abdulaziz Road Development Project: The northern section of the project stretches 4.7km and will include four bridges, four lanes and one tunnel, with a capacity of up to 450,000 vehicles per day.
> Othman Bin Affan Road Development Project: The northern section will span 4.3km and include seven bridges and other related upgrades to enhance traffic flow across northern Riyadh. The project will have a daily capacity of up to 500,000 vehicles.
> Second phase of engineering enhancements for congested areas: This project targets eight locations across the city’s road network, where advanced engineering solutions will be applied to reduce congestion and improve intersection performance, increasing traffic capacity by 40% to 60%.
The contract for the Jeddah Road Development Project is the latest of several high-profile deals awarded by the RCRC recently. In May, it awarded an estimated SR5bn ($1.3bn) contract to construct the Sheikh Jaber Al-Sabah Road project in Riyadh.
That contract went to a joint venture of Riyadh-based Al-Rashid Trading & Contracting Company (RTCC) and Turkiye’s IC Ictas.
Stretching 12km, the project runs from Khurais Road to Al-Thumama Road and is a key component of the Second Eastern Ring Road scheme.
Works include five interchanges: Prince Bandar, King Abdullah, Imam Abdullah, Dammam Road and Al-Thumama.
In 2021, Saudi Arabia’s Crown Prince Mohammed Bin Salman Bin Abdulaziz Al-Saud said the population of Riyadh would double to 15-20 million people by 2030.
He directed government entities to work closely with the RCRC to prepare the city’s development strategy.
The RCRC’s major projects include Riyadh Metro, Riyadh Art, Sports Boulevard, King Salman International Park, Green Riyadh and several road development projects in the capital.
READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDFStress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.
Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
> AIRPORTS: Dubai and Riyadh reaffirm airport ambitions> INDUSTRY REPORT: Dubai eyes tourism sector recovery> DATA CENTRES: Big Tech falls short on data centre promise> LEADERSHIP: Aramco’s citizen developers accelerate digital changeTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/17523376/main.jpg -
Dubai announces First Al-Khail road development project2 July 2026
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Dubai’s Executive Council has announced the First Al-Khail Street Development project, which will run parallel to Sheikh Zayed Road.
The scheme comprises a 15-kilometre elevated carriageway with three lanes in each direction.
According to a Dubai Media Office statement, “The project will provide access to areas including Al-Barsha, Al-Quoz, Business Bay and Meydan.”
“It is expected to serve more than 2.6 million people and reduce travel time on Sheikh Zayed Road by 51% during peak hours,” the statement added.
Designed to accommodate more than 9,000 vehicles an hour, construction is expected to begin in the third quarter of 2027, with completion targeted for 2030.
The development forms part of a wider AED18bn ($5bn) programme covering initiatives related to culture, trade, infrastructure, Emiratisation, finance, investment, urban planning and the city’s population census.
Projects approved by The Executive Council:
– Dubai Cultural Strategy
– Dubai Customs Strategy
– First Al Khail Street Development Plan
– ‘Dubai Population Now’ Real-Time Population Census and Growth Monitoring Initiative
– Emirati Talents Strategy in Private Education
– Dubai… pic.twitter.com/665ARlV3cK— Dubai Media Office (@DXBMediaOffice) July 1, 2026
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