Saudi Arabia will not establish formal relations with Israel unless Palestine is recognised as an independent state, it has announced.

The hardening of the oil-rich Kingdom’s stance came within hours of Donald Trump’s proposal to displace the people of Gaza.

Following the US president’s remarks during a White House press conference, it issued a statement promising to “continue its relentless efforts to establish an independent Palestinian state with East Jerusalem as its capital”.

Under the leadership of Mohammed bin Salman, the Saudi crown prince, the country has in recent years courted speculation of a normalisation agreement with Israel and has spoken of a “credible pathway” to a Palestinian state as a condition.

During the press conference in Washington DC, Benjamin Netanyahu, the Israeli prime minister, said establishing formal relations was “not only feasible, I think it’s going to happen”.

However, the statement released by Saudi Arabia’s foreign affairs ministry in the early hours of Wednesday appeared to signal a change in the Kingdom’s position to that of demanding a Palestinian state as the price for establishing full diplomatic relations with Israel.

The reaction to Mr Trump’s announcement that he would create a “Riviera of the Middle East” would appear to put Saudi-Israeli normalisation out of reach for now, despite it being seen as one of the president’s key diplomatic objectives.