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The challenges facing Riyadh, include the dwindling of Saudi Arabia’s income resulting from the drop in oil prices, Islamic terrorism in its own territory, the military intervention in Yemen, and hostile relations with Iran. Israeli decision makers must monitor these sources of instability, while making an effort to foster ties with Riyadh based on common regional interests. At the same time Israel should recognize that as long as the internal Saudi arena is unstable, and especially as long as the deadlock in the Israeli-Palestinian arena continues, the bilateral relations will remain limited.