Israeli Prime Minister Benjamin Netanyahu says Saudi Arabia now sees Tel Aviv "as an ally rather as an enemy" as he claims there is "a great shift taking place" in the Arab policy toward the Palestinian issue.

“Saudi Arabia recognizes that Israel is an ally rather than an enemy because of the two principal threats that threaten them, Iran and Daesh," he told CNN’s Fareed Zakaria on the sidelines of the World Economic Forum in Davos Friday.

Both Saudi Arabia and Israel are fiercely opposed to a nuclear accord between Iran and the West which came into force recently. They are worried the agreement could boost Iran's role in the region.

Last week, The Wall Street Journal reported that Israel was actively seeking to strengthen ties with Arab powers in the wake of the nuclear deal with Iran.

Daesh ideology is rooted in Wahhabism which is widely promoted by Saudi clerics and tolerated by the kingdom's rulers. Both Saudi Arabia and Israel support Takfiri groups fighting in Syria. Meanwhile, there is no known case of a Daesh attack on either Saudi or Israeli targets.

Netanyahu also said "there is a great shift taking place" in the Saudi-led policy toward the Palestinian issue, citing Israel's "relationships" with unknown Arab states.

"By nurturing these relationships that are taking place now with the Arab world, that could actually help us resolve the Israeli-Palestinian conflict, and we’re actually working towards that end,” he said.

Netanyahu’s overtures to Saudi Arabia and its allies come in the midst of international outcry after Tel Aviv declared 154 hectares (380 acres) of Palestinian territory in the Jordan Valley as “state lands.”

Yuval Steinitz, Israel’s minister for national infrastructure, energy, and water, returned recently from an energy conference in the UAE, where Tel Aviv recently established a diplomatic mission. Israel’s Channel 2 suggested that the real aim of the trip may have been for the two sides to covertly conduct strategy meetings.

In recent months, Egypt returned its ambassador to Tel Aviv while a group of Jordanian pilots paid a “working visit” to Israel and trained closely with their Israeli counterparts during US-sponsored military exercises.

Turkish President Recep Tayyip Erdogan also recently expressed an interest in easing up tensions with Israel after reaching an agreement to restore relations last month. Sudan is also said to be considering normalizing ties with Israel.