Doing an end-run around the Israeli-Palestinian conflict?

The New York Times published an article recently by noted columnist Thomas Friedman, who said that the Biden administration is considering an Arabian end-run around the Israeli-Palestinian death embrace.
The idea is that the US and Saudi Arabia would strike a security deal that would give the oil-rich kingdom a high-level, permanent security guarantee, akin to the commitments that NATO countries give one another. In this instance, an attack on Saudi Arabia would be considered an attack on the US, obliging US military forces to intervene.
This deal would be aimed chiefly at Iran, Saudi Arabia's chief rival for hegemony in the Persian/Arabian Gulf.
In addition, Saudi Arabia would get various weapons systems that it hasn't received to date, partly because they would threaten Israel's qualitative military edge. And, it would receive US dispensation to create a civilian nuclear energy program, which would presumably wean it off its total dependence on domestic oil.
Saudi Arabia, in return, would settle the Yemen war, and commit to not building further political, military, or economic ties with Iran or China. Saudi Arabia has already signed a peace deal with Iran, but nothing else has happened. It's also openly flirting with Chinese investors, seeking access to their bountiful infrastructure investment funds.
Most importantly for Israel, Saudi Arabia would sign a peace deal with Israel, thereby ending Israel's long exclusion from the Muslim Middle East. Although Israel has a recent peace deal with the United Arab Emirates, Morocco, and Bahrain, in addition to peace with Jordan and Egypt, a Saudi deal would be a significant breakthrough.
The Saudis would demand concessions from the Israelis, including a halt to further settlement construction and expansion in the West Bank, and a commitment not to annex that territory. This would upset the nationalist right in Israel, and Benjamin Netanyahu, the current Israeli prime minister, might have to dump his ultra-right allies and build a new coalition with centrist parties.
The US would get what it wants: a secure link to Saudi Arabia that would stop flirting with Iran and China, a half to Israel's creeping annexation of the West Bank, and, possibly, the groundwork for a future two-state deal between Israel and Palestine.
I find it hard to believe that the Israelis will go for this. The ultra-nationalists and their allies are hell-bent on annexing at least Area C in the West Bank, and Saudi Arabia can't touch them anyway. Sure, having a peace deal with the Saudis would be nice, but the hard right doesn't care about that all that much. A state of perpetual war, which has no real military threat, suits them.
If Netanyahu pivots to the center parties and dumps the political right, he'll lose his ability to shape his own future in court. He's facing multiple indictments in court, and the only way he will wriggle free is if he pushes ahead with his "judicial reform," aka "coup." The centrist parties won't buy that, so he's stuck with the nutty, but powerful, right-wingers.
But who knows? It's an interesting alternative, and even if it doesn't work now, it may reappear in a few years.