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Saudi Arabia ARAB POLITICS Tensions in the Middle East are a major concern for Saudi Arabia. Formation of the Jewish state of Israel in Palestine in 1948 created problems for Saudi Arabia and the rest of the Muslim world. Palestinian Arabs, most of them Muslims, fled as Jewish settlers occupied the lands on which the Arabs had lived for centuries. Many of the refugees have lived in refugee camps in the surrounding Arab countries ever since. Most Arab countries have not recognized the legitimacy of the state of Israel. As the richest Arab country and the site of the holy cities of Islam, Saudi Arabia has strongly opposed Israel. However, the United States, Israel’s chief supplier of money and military equipment, is Saudi Arabia’s main oil market. This makes for a tricky political situation at times, as Saudi Arabia develops its policies for well into the twenty-first century. What about Saudi Arabia itself? Will the House of Saud be able to control the often opposing forces of modernization and tradition? Will the young technocrats and other professionals continue to accept their second-tier position in their country? Will the Wahhabi fundamentalists rebel against the replacement of their values with modern ideas? Will the Saudis continue to depend on foreign workers—engineers, architects, and economists—to run their economy, and to do the jobs Saudis do not want to do? Perhaps the biggest question of all is what the future holds for oil. In the past, the demand for oil and its price have gone sharply up and down each year. It is hard for a country to make plans when it cannot know what its income will be from one year to the next. The biggest uncertainty in regard to oil, however, is whether the world will continue to have such a huge demand for it. Already, alternative sources of energy, such as hydrogen, fuel cells, ethanol and bio-diesel, and both wind and solar power, are being developed. If the world made a major shift to any of them, Saudi