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The stars aligned for a breakthrough, but future prospects are little changed.

Last week, two of the Middle East’s biggest rivals, Saudi Arabia and Iran, emerged from a conference in Beijing and announced that they had made amends. Officials said they were normalizing diplomatic ties after more than seven years of bitter relations and confrontation, reviving their embassies in Tehran and Riyadh and pursuing further talks toward a rapprochement. The move, which shocked many, should not be surprising.

Domestic instability in Iran, the recent wave of normalization efforts between former foes in the region (such as Turkey, Saudi Arabia, the UAE, Qatar and Israel), the slow death of the Iran nuclear deal, and signs of further U.S. disengagement from the Middle East sowed the seeds for Saudi-Iranian dialogue. With the U.S. taking a back seat militarily and with no regional security framework to prevent rapid escalation, Riyadh and Tehran are giving warmer ties a try. But decades-long tensions still lurk beneath the surface, making rapprochement a gamble for both countries.

The Iranian-Saudi Rivalry

The breaking point in Saudi-Iranian ties came on the evening of Jan. 2, 2016, when Iranian demonstrators set fire to the Saudi Embassy in Tehran to protest the execution of a Saudi Shiite cleric, Sheikh Nimr al-Nimr. In response, Riyadh shuttered the embassy, cut diplomatic ties and pressured partners to isolate Iran. The 2016 incident was the final straw for Saudi Arabia, but it followed decades of competition for regional influence.

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