Riyadh announced Nayef al-Sudairi as the non-resident ambassador for the Palestinian Territories on Saturday.
Al-Sudairi is the current ambassador to Jordan, according to a social media post from the embassy in Amman confirmed by a Saudi foreign ministry official.
The appointment represents "an important step" underscoring the desire of King Salman and Crown Prince Mohammed bin Salman "to strengthen relations with the brothers of the State of Palestine and give it a formal boost in all areas," Sudairi said in a video broadcast by the Saudi state-affiliated Al-Ekhbariya channel.
The file for the Palestinian Territories has traditionally been handled by Saudi Arabia's embassy in Amman.
Saudi Arabia does not recognize Israel and did not join the 2020 U.S.-brokered Abraham Accords that saw Israel establish ties with two of the kingdom's neighbors, the United Arab Emirates and Bahrain.
But during U.S. President Joe Biden's tour of the Middle East last year, the Saudi civil aviation authority announced that it was lifting overflight restrictions on "all carriers," paving the way for Israeli planes to use Saudi airspace.
The kingdom denied at the time that the move was "a precursor to any further steps" toward normalization.
Riyadh has repeatedly said it would stick to the decades-old Arab League position of not establishing official ties with Israel until the conflict with the Palestinians is resolved.
Yet in recent months, Riyadh and Washington have held talks on Saudi conditions for progress on normalization, including security guarantees and assistance with a civilian nuclear program with uranium enrichment capacity, according to people briefed on the meetings.
Hesham Alghannam, a Saudi analyst at the Naif Arab University for Security Sciences in Riyadh, told AFP this week that Saudi Arabia needs to know whether the Israelis are "actively working towards making tangible progress on resolving the Palestinian-Israeli conflict."
After a meeting on Saturday at which Sudairi presented a copy of his credentials, Majdi al-Khaldi, Palestinian presidential adviser for diplomatic affairs, said he "welcomed" the appointment, official Palestinian news agency Wafa reported.
It "will contribute to strengthening the strong and solid brotherly relations that bind the two countries and the two brotherly peoples," Khaldi said.
A spokesman for the Israeli foreign ministry offered no immediate comment, referring AFP to recent comments by Foreign Minister Eli Cohen that "peace between Israel and Saudi Arabia is a matter of time."
Saturday's move "gives insight into how diplomatic relations might be between Saudi Arabia and Israel: a Saudi ambassador to Palestine with a file for Israel," said Aziz Alghashian, a Saudi analyst and expert on Saudi-Israeli relations.
"The immediate signal is to treat Saudi demands for Israeli concessions seriously."
