Saudi Arabia has suspended talks on a possible normalization of relations with Israel amid fighting between Israel and the Palestinian militant group Hamas, AFP reports, citing a source.

"Saudi Arabia has decided to pause discussion on possible normalisation and has informed US officials," said a source familiar with the discussions.

Saudi Arabia, in the weeks before the Hamas attack on Israel, had spoken of progress in US-led diplomacy to normalize relations with Israel, a landmark step for the conservative kingdom that is the custodian of Islam's two holiest sites.

But Riyadh has expressed growing concern about the fate of Palestinians in the Hamas-controlled Gaza Strip, where Israel has carried out thousands of attacks and ordered the evacuation of the northern territory, forcing thousands to flee.