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RIYADH/CAIRO (Reuters) - Arab powers appear to be prioritizing close ties with the United States that are vital to countering Iran over traditional unswerving support for the Palestinians in their reaction to President Donald Trumps Middle East peace plan.

U.S. President Donald Trump shakes hands with Israel's Prime Minister Benjamin Netanyahu during a joint news conference to announce a new Middle East peace plan proposal in the East Room of the White House in Washington, U.S., January 28, 2020. REUTERS/Joshua Roberts

At a White House event on Tuesday with Israeli Prime Minister Benjamin Netanyahu, Trump proposed creating a Palestinian state but demilitarized and with borders drawn to meet Israeli security needs, while granting U.S. recognition of Israeli settlements on occupied West Bank land and of Jerusalem as Israels indivisible capital.

The plan diverges from previous U.S. policy and a 2002 Arab League-endorsed initiative that offered Israel normal relations in return for an independent Palestinian state and full Israeli withdrawal from territory captured in the 1967 Middle East war.

Saudi Arabias response exemplified the careful balance now required from Gulf Arab monarchies, Egypt and Jordan which rely on U.S. military or financial backing and find themselves aligned with the United States and Israel in confronting Iran.

The Saudi Foreign Ministry expressed appreciation for Trumps efforts and support for direct peace negotiations under U.S. auspices. At the same time, state media reported that King Salman had called the Palestinian president to reassure him of Riyadhs unwavering commitment to the Palestinian cause.

Egypt and Jordan, which already have peace deals with Israel, as well as Bahrain, Qatar and the United Arab Emirates (UAE) used similar language that swung between hope for re-starting talks and caution against abandoning long-held stances.

Despite Palestinians rejection of the plan and boycott of Trump over perceived pro-Israel bias, three Gulf Arab states - Oman, Bahrain and the UAE - attended the White House gathering in a sign of changing times.

In a bitterly divided Arab world, backing for Palestinians has long been seen as a unifying position but also often a source of internal recriminations over the extent of that support, especially as some states have made independent, pragmatic overtures to historical adversary Israel.

Trump and Netanyahu praised the UAE, Bahraini and Omani ambassadors for attending the White House announcement: What a sign it portends - I was going to say of the future - what a sign it portends of the present, Netanyahu said to applause.

Critics were less kind, condemning the envoys presence as a shameful abandonment of the Palestinian cause.

No government or ruler wants to be seen to sell Palestine so cheaply and hand Netanyahu such a victory and, in fact, end up footing the bill, said Neil Quilliam, senior research fellow at Britains Chatham House think-tank.

At the same time, all states except perhaps Egypt are dependent upon the U.S. and will not risk angering Trump, given his propensity to act like a petulant child.

Saudi King Salman has previously reassured Arab allies he would not endorse any plan that fails to address Jerusalems disputed status or Palestinian refugees right of return, amid perceptions Riyadhs stance was changing under Crown Prince Mohammed bin Salman, who is close to Trumps son-in-law and senior adviser Jared Kushner, the plans main architect.

Palestinian officials say Prince Mohammed, the de facto Saudi ruler, has pressed Abbas in the past to support the Trump plan despite serious concerns. Saudi officials have denied any differences between the king and crown prince.

Naif Madkhali, a prominent Saudi who tweets often in support of the government, blasted Trumps plan: No and a thousand nos, he wrote under the hashtag #Down_with_the_deal_of_the_century.

In Bahrain, which hosted a U.S.-led conference last June on the Palestinian economy as part of Trumps broader peace plan, opposition groups came out strongly against the proposal.

Whoever today gives up the Holy Land of Palestine will tomorrow give up his land in order to preserve his seat, tweeted Waad party leader Ibrahim Sharif. Treachery is a stab in the back and is not a point of view.

Any change to the consensus on refugees right of return to what is now Israel and the Palestinian Territories would reverberate loudest in Jordan, which absorbed more Palestinians than any other country after Israels creation in 1948.

Palestinians, which by some estimates now account for more than half of Jordans population, hold full citizenship but are marginalized and seen as a political threat by some people of Jordanian descent.

The biggest risk is to Jordan, where sentiment towards the issue and rising levels of discontent converge, said Quilliam.

Analysts predicted most Egyptians would reject the plan but not present a problem to President Abdel Fattah al-Sisis government, which has already cracked down harshly on dissent.

I feel angry and helpless as an Egyptian, an Arab, a Muslim and above all a human... prominent blogger ZainabMohamed wrote of Trumps plan.

The Palestinian Foreign Ministry criticized Arab countries after their generally positive comments on Trumps plan.

Following the revelation of details of the American-Israeli conspiracy, it is unacceptable to hide behind ambiguous and murky statements in order to escape confronting this conspiracy, it said in a statement.

However, a spokesman for Abbas said later he had received calls from Saudi King Salman and Lebanese President Michel Aoun supportive of the Palestinian position.

Reporting by Stephen Kalin in Riyadh, Lisa Barrington and Alexander Cornwell in Dubai, Amina Ismail and Ulf Laessing in Cairo, Nidal al-Mughrabi in Gaza and Ali Sawafta in West Bank; Writing by Stephen Kalin; Editing by Mark Heinrich

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Arabs prioritize key ties with U.S. against Iran in reacting to Trump peace plan - Reuters