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Saudi Arabia's de facto leader said Wednesday that a historic normalisation of relations with Israel is getting "closer," as he also warned that the kingdom will seek a nuclear weapon if foe Iran gets one first.

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 settlements in the occupied West Bank.

"For us, the Palestinian issue is very important. We need to solve that part," he said, according to excerpts of the interview released by Fox News.

Israel has normalised 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 Shia 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.

Saudi Arabia has been seeking security guarantees, including reportedly a treaty, with the United States in return for normalising with Israel.

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.

Israel's is the region's only nuclear weapons state, if an undeclared one.

President Joe Biden 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 US government maintains historically close ties to the Saudi leadership, but that relationship has also been hit by controversy over MbS's role, according to US intelligence, 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 normalisation between Saudi Arabia and Israel would be a "transformative event."

"To bring these two countries together in particular would have a powerful effect in stabilising 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."