In recent days, there have been many reports on intensive contacts between Saudi Arabia and Iran, at the initiative of the latter, aimed at finding a resolution to the Lebanon crisis and preventing civil war in Lebanon.  It should be remembered that during the July-August 2006 war, Saudi Arabia took a firm stance against Hizbullah, Syria, and Iran, and that recently Saudi King Abdullah invited the Hizbullah leadership in order to chastise it and even to make veiled threats of economic consequences. 
Al-Hayat: Syria Foils Saudi-Mediated Settlement of Lebanon Crisis
The London daily Al-Hayat, which is Saudi-owned and whose Saudi sources are therefore reliable, reported January 24, 2007, on the recent Iran-Saudi Arabia contacts that preceded the January 23 escalation in Lebanon.
According to the Al-Hayat report, the contacts for resolving the crisis gained momentum following Saudi pressure on Hizbullah during a January 3, 2007 meeting between the Hizbullah delegation and King Abdullah.  Saudi Ambassador to Lebanon Abd Al-'Aziz Khoja led a mediation initiative, following which a draft agreement was drawn up between the March 14 Forces and Hizbullah.
The draft agreement focused on two main issues, and reflected partial concessions by both sides: The March 14 Forces agreed that the international court for the assassination of former Lebanese prime minister Rafiq Al-Hariri would be re-approved by the future Lebanese national unity government (even though it had already been approved by the government of Lebanese Prime Minister Fuad Al-Siniora) only after a working group discussed the reservations of the opposition. Hizbullah Secretary-General Hassan Nasrallah agreed that the future unity government would include 19 ministers from the March 14 Forces, 10 ministers from the opposition, and one more minister to be appointed only with the agreement of the March 14 Forces.
As the draft agreement was being drawn up, Iranian Supreme National Security Council Chairman Ali Larijani visited Saudi Arabia. During the visit, Larijani arrived at an agreement with the Saudi leadership to advance a resolution to the Lebanon crisis in accordance with the draft that the Saudi Ambassador to Lebanon had sponsored.
The March 14 Forces agreed to the draft agreement, as did Iran, as mentioned. However, Nasrallah delayed answering. Finally, on January 18, during an interview on Hizbullah's Al-Manar TV channel, Nasrallah rejected the draft because it did not include General Michel Aoun's demand for early parliamentary elections.
The next day, Saudi Arabia called Iran to find out what the holdup was over the agreement. The answer it received was that senior Iranian officials still viewed the draft agreement positively, and they intended to send Larijani to Syria on the coming Monday, January 21, in order to obtain Syria's agreement. The Saudis were also told that Larijani was in touch with Hizbullah as well.
On January 22, 2007, Larijani went to Syria and met with Syrian officials and then with a Hizbullah delegation there. Sources following the contacts said that Larijani was heavily criticized during the talks in Damascus for accepting the inclusion of the international court in the Saudi draft agreement. The talks ended with Syria's rejection of the draft agreement, 
Upon receiving this answer, Larijani briefly visited Saudi Arabia, on Tuesday, January 23, bringing some alternate ideas suggested by Syria - most of which gave the advantage back to Hizbullah. The Saudi leadership would not agree to change the draft, and that day the escalation in Lebanon began. 
Iranian-Saudi Talks Resume on Higher Level
Following this failure, in recent days the contacts between Iran and Saudi Arabia have been renewed. The Lebanese daily Al-Safir reported on January 24, 2007 that Iran had invited Saudi National Security Council Chairman Bandar bin Sultan, who was to meet with both Iranian Supreme Leader Ali Khamenei and with his Iranian counterpart Ali Larijani. 
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The Lebanon daily Al-Akhbar, which is close to Hizbullah, reported today, January 25, 2007, that bin Sultan had delivered a letter from King Abdullah to Larijani. It also said that Iranian Foreign Minister Menouchehr Mottaki had spoken by phone with his Saudi counterpart Saud Al-Faisal, and that the sides had decided to continue with their mutual consultations in order to arrive at a resolution for the Lebanon crisis that would satisfy all parties.
Mottaki stated to Iranian MPs that understandings had been reached between Iran and Saudi Arabia with regard to Lebanon and Iraq, and reiterated the firmness of Iran's position on these two issues. 
Iranian-Saudi Agreement Reached?
It should be noted that the declared position of Saudi Foreign Minister Saud Al-Faisal regarding Iran's intervention in Arab matters is that he sees this as "foreign interference." Thus, in a January 24, 2007 interview with the French daily Le Figaro, he expressed his objections to France's sending an emissary to Iran to mediate in the crisis because, he explained, this would give Iran legitimacy to intervene in domestic Arab affairs. 
Following Bandar bin Sultan's meetings in Iran, he and Larijani held a press conference January 25, 2007, at which they announced that Iran and Saudi Arabia had reached an agreement; however, the details of the agreement remained concealed.
Despite the Saudi objections to the French visit, as expressed by Saudi Foreign Minister Saud Al-Faisal, Ali Larijani announced during the press conference that in the coming days a French delegation would arrive in Iran. Larijani added that "Saudi Arabia can play an important role in solving the problems and instilling calm in the region, and Iran and Saudi Arabia have common interests that can help expand their cooperation..."
Bin Sultan, for his part, said during the press conference that "King Abdullah has stressed the importance of unity and solidarity among the countries of the region. Saudi Arabia believes that the countries of the region must ensure the region's independence, and not permit foreigners to interfere in this matter." He further stressed King Abdullah's position that "the Islamic world must be alert to [attempts] by the enemy to sow civil war... and not permit the enemy to arouse disputes between Sunnis and Shi'ites - after all, we all worship one God..."
Bin Sultan added: "The countries of the region must be alert to and aware of the problems existing [in the region], particularly in Lebanon and Iraq. Saudi Arabia and Iran aspire to lead to unity among the countries of the region... If solidarity prevails among the countries of the region, the foreign countries will not interfere in [their] internal affairs. In talks we [i.e. Iran and Saudi Arabia] held today, we discussed the issues of the region, among them Iraq and Lebanon. We hope that these negotiations will lead to the consolidation of the interests of the countries and nations in the region... The foreign ministers [of Iran and Saudi Arabia] will continue to deal with the issues and the agreements that were reached."
Finally, bin Sultan said that "Iran's nuclear dossier is in a very sensitive situation, and as a rule it should be talked about less, so that there will be fewer complications with this issue." 
In a speech yesterday, January 24, 2007, Hizbullah leader Nasrallah said, referring to the Iran-Saudi contacts: "Allah will bless all those who help Lebanon, but every agreement between two countries or two governments does not bind the Lebanese, because the Lebanese must seek their own interests and not the interests of Saudi Arabia and Iran." 
*H. Varulkar is a Research Fellow at MEMRI.
 Actually, the talks are also aimed at reducing tensions between the U.S. and Iran.
 For more information, see MEMRI Special Dispatch No. 1414, "Despite Arab Diplomatic Efforts, Hizbullah Threatens Violent Escalation - To Begin this Coming Monday (January 8, 2007)," January 5, 2007, Despite Arab Diplomatic Efforts, Hizbullah Threatens Violent Escalation – To Begin this Coming Monday (January 8, 2007) .
 See MEMRI Special Dispatch No. 1414, "Despite Arab Diplomatic Efforts, Hizbullah Threatens Violent Escalation - To Begin this Coming Monday (January 8, 2007)," January 5, 2007, Despite Arab Diplomatic Efforts, Hizbullah Threatens Violent Escalation – To Begin this Coming Monday (January 8, 2007) .
 It should be noted that on January 24, 2007, Syrian President Bashar Al-Assad met with Qatari Emir Sheikh Hamad bin Khaleifa Al-Thani. During the meeting, they discussed ways of bringing about normalization in Syrian-U.S. relations, since the U.S. is close to the Qatari leadership. Al-Khaleej, UAE, January 25, 2007.
 Al-Hayat (London), January 24, 2007.
 Al-Safir (Lebanon), January 24, 2007.
 Al-Akhbar (Lebanon), January 25, 2007.
 Le Figaro (France), January 24, 2007.
 ISNA, Iran, January 25, 2007.