Israeli Prime Minister Benjamin Netanyahu has dismissed Iran's negative remarks about peace with Arabs, saying, "Iran will not prevent [Israel] from further expanding the circle of peace.”

On Tuesday Iran’s Supreme Leader Ali Khamenei warned that governments normalizing relations with Israel would lose, following discussions on Saudi-Israel normalization with US mediation.

US Secretary of State Antony Blinken has stressed that resolving Palestinian issues is crucial for any normalization with Saudi Arabia.

Earlier on Tuesday, Iran's Supreme Leader Ali Khamenei slammed the peace efforts, stating, "The position of the Islamic Republic is that countries that make the gamble of normalization with Israel will lose. They are betting on a losing horse.”

In another comment, Khamenei said, "The Zionist regime is in decline.”

Israel's Defense Minister Yoav Gallant also responded, condemning Iran's regime for threatening peace efforts and stated, "The murderous terror regime in Iran has already succeeded in dissolving several countries it has taken over. Now it is trying to sabotage peace efforts with idle threats."

While Iran reestablished diplomatic ties with Saudi Arabia earlier this year, Iranian officials have consistently criticized Riyadh's attempts to forge relations with Israel, considering it harmful to the Palestinians.

Israeli-Saudi normalization could reshape the Middle East significantly, aligning two major US allies against Iran.

Tehran provides support to militant Palestinian groups, such as Hamas and the Islamic Jihad, which have escalated attacks against Israel and its civilians this year. These groups are part of Iran's network of proxy forces spanning from Iraq to Lebanon and Yemen, receiving both financial and military assistance from Tehran, a fact openly acknowledged by the Iranian government.