Saudi Arabia's top diplomat hinted Tuesday that the kingdom could recognize Israel if the Palestinian issue is resolved.

Asked at a panel at the World Economic Forum in Davos whether Saudi Arabia could take this step as part of a wider agreement after a resolution of the Palestinian conflict, Prince Faisal bin Farhan Al Saud said, "Certainly."

"We agree that regional peace includes peace for Israel, but that could only happen through peace for the Palestinians through a Palestinian state," Prince Faisal bin Farhan said.

Prince Faisal said securing regional peace through the creation of a Palestinian state was "something we have been indeed working on with the U.S. administration, and it is more relevant in the context of Gaza."

After the eruption of war last October between Israel and the militant Palestinian group Hamas that rules Gaza, Saudi Arabia put on ice U.S.-backed plans for the kingdom to normalize ties with Israel, two sources familiar with Riyadh's thinking said, in a swift reordering of its diplomatic priorities.

The two sources told Reuters there would be some delay in the U.S.-backed talks on the normalization of Saudi-Israel ties, which is seen as a key step for the kingdom to secure what it considers the real prize of a U.S. defense pact in exchange.

Prior to the Oct. 7 Hamas incursion, both Israeli and Saudi leaders had signaled they were moving steadily toward establishing diplomatic relations that could have reshaped the Middle East.