Probably regional geo-politics. Hamas are not some ragamuffin group of freedom fighters, funded by nickels & dimes, but a proxy arm of Iranian power. As are Hezbollah. There's speculation that they're acting on Iranian orders to torpedo an Israeli-Saudi normalisation of relations. They carry out atrocities and Israel never fails to respond in kind and escalate dramatically, meaning the Saudis would probably have to edge back.
This has been a recurring theme in fact. If there's any sign of some sort of breakthrough, the extremists on one side or other will usually have a good go at scuppering it. Organisations like Hamas & the extreme right in Israel actually have a symbiotic relationship, in that each one needs to other in order to justify both their existences.
The Saudi demands as the price of that rapprochement with Israel are not justice for the Palestinians (although they may pay that cause lip service) but US guarantees over their (Saudi Arabia's) security.
Hamas & Hezbollah (Hamas probably more so than Hezbollah) are also Islamic fundamentalists, who hate people like the Saudi and Emirati monarchies. So there's no love lost between the Gulf states and organisations like Hamas. One of the driving factors in the thawing of relations between Israel and the Gulf is the growing realisation that they have a common enemy that's more harmful to both of them than Israel is to Saudi Arabia and vice versa.
In truth, the Arab world is all lip service about the Palestinians and doesn't really care about them. The Arab League ordered its members not to offer them citizenship. It's incredibly cynical and means they'll always be Palestinian refugees. Is it really infeasible that countries with combined populations of over 400m couldn't absorb 0.2% of that number? It's like us taking in 100,000 refugees. That 0.2% is our current and projected rate every year, not a one off.
This is why you have to be careful as this isn't simply a game of cops and robbers, with one side good and the other bad.
