Crown Prince Mohammed bin Salman denied in an interview with Fox News that the Saudis have suspended US-brokered talks with Israel.
"Every day we get closer," the prince, who is widely seen as effectively the kingdom's leader, said.
But he said the kingdom was seeking more progress on ensuring the rights of the Palestinians, while Prime Minister Benjamin Netanyahu's hard-right government continues to pursue controversial settlements in the occupied West Bank.
"For us, the Palestinian issue is very important. We need to solve that part," he said. "We need to ease the life of the Palestinians."
Israel has normalized relations with five Arab nations -- but recognition by Saudi Arabia is seen as a historic prize in Middle East diplomacy, due to the kingdom's role as the guardian of Islam's two holiest sites.
Both Israel and Saudi Arabia, as well as other Arab states, share mutual hostility toward Iran, a Shiite clerical state and frequent rival to the Saudis.
In the interview, the crown prince, most commonly known by his initials MBS, renewed warnings that Saudi Arabia would seek nuclear weapons if Iran does.
"If they get one, we have to get one," he said.
- War against 'world' -
Saudi Arabia has also been seeking security guarantees, including reportedly a treaty, with the United States in return for normalizing with Israel, the region's only nuclear weapons state -- even if an undeclared one.
MBS commented on the possible security pact, saying that Saudi-US ties go back eight decades and that an accord would "strengthen" military and economic cooperation. However, he went into little detail about what this might look like.
Iran denies seeking a nuclear weapon but has breached agreed limits on uranium enrichment since former president Donald Trump left a 2015 international agreement to put curbs on Tehran's nuclear program in return for lifting sanctions.
But MBS said it would be futile, in any case, for Iran to try and get the bomb because any use would immediately trigger "war with the rest of the world."
President Joe Biden also discussed Saudi Arabia during a meeting with Netanyahu on the sidelines of the UN General Assembly.
The Biden administration's diplomatic plans in the Middle East have been rocked by tense relations with Netanyahu, who is accused at home by opponents of undermining Israeli democracy through far-reaching reforms of the judiciary.
The United States maintains historically close ties to the Saudi leadership, but that relationship has also been hit by controversy over MBS's role, according to Washington, in the murder of journalist Jamal Khashoggi, a US resident.
Secretary of State Antony Blinken, in an interview with ABC News on Wednesday, said that normalization between Saudi Arabia and Israel would be a "transformative event."
"To bring these two countries together in particular would have a powerful effect in stabilizing the region, in integrating the region, in bringing people together, not having them at each other's throats," Blinken said.
But he acknowledged it was "hard to get there."
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