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Summary:
The kingdom of Saudi Arabia, ruled by the Al Saud family since its founding in 1932, wields significant political and economic influence as the birthplace of the Islamic faith and by virtue of its large energy reserves. Since 2005, King Abdullah bin Abd al Aziz Al Saud has sought to strengthen Saudi relations with European and Asian counterparts and has worked to build and lead an Arab consensus on regional security issues such as Lebanon and the Israeli-Palestinian conflict. Recent domestic reforms have codified royal succession rules, begun restructuring the justice system, and updated some educational curricula and practices. An Al Qaeda-inspired terrorist campaign inside the kingdom appears to be ebbing as security improvements and anti-extremism campaigns are implemented. However, the threat of domestic terrorism remains. Robust energy export revenues and investment-friendly reforms continue to strengthen the kingdom's regional and global economic position. A close Cold War-era relationship between the United States government and the ruling Al Saud family was built on shared interests in securing Saudi oil production and in combating global Communism. In the post-Cold War period, the emergence of the Al Qaeda terrorist threat and volatile regional security conditions in the Middle East have tested U.S.-Saudi relations. The direct participation of 15 Saudi nationals in the terrorist attacks of September 11, 2001, and the identification of several Saudi nationals and entities as alleged supporters of terrorism have called into question Saudi Arabia's reliability as an ally for some U.S. observers. Increased official counterterrorism cooperation and shared concerns about Iranian foreign policy have provided a new strategic logic for U.S.-Saudi security relations since 2003. Longstanding defense ties remain intact, and U.S. arms sales to Saudi Arabia have continued, with over $14 billion in potential Foreign Military Sales to Saudi Arabia approved by the Bush Administration and Congress since January 2005. While security cooperation has improved since 2003, the United States and Saudi Arabia continue to face a core challenge identified by the 9/11 Commission in its final report: reestablishing a broader bilateral relationship that "leaders on both sides are prepared to publicly defend." The Bush Administration has attempted to meet this challenge by continuing high-level consultations with key decision makers in the Saudi royal family on issues of mutual concern, including energy policy, finance, Israeli-Arab peace, human rights, and political and economic reform. In conjunction with a recent visit by president Bush to Saudi Arabia, the Administration announced new agreements relating to nuclear and security cooperation and visas. Congress has included prohibitions on the provision of U.S. foreign assistance to Saudi Arabia in annual foreign operations appropriations legislation each year since FY2005. However, the Administration has used presidential waivers, existing legal authorities, and "no-year" funding to continue the provision of limited counterterrorism and International Military Education and Training assistance to Saudi Arabia during this period. This report provides background information about Saudi Arabia and analyzes current issues in U.S.-Saudi relations. It will be updated. See also CRS Report RL32499 - Saudi Arabia: Terrorist Financing Issues and CRS Report RS21695 - The Islamic Traditions of Wahhabism and Salafiyya.