Jared Kushner
Jared KushnerWAM/TPS

Jared Kushner’s new private-equity fund plans to invest millions of dollars of Saudi Arabia’s money in Israeli startups, people familiar with the investment plan told The Wall Street Journal on Saturday.

Affinity Partners, which has raised more than $3 billion, including a $2 billion commitment from the kingdom’s sovereign-wealth fund, has already selected the first two Israeli firms to invest in, these sources said.

The decision marks the first known instance that the Saudi Public Investment Fund’s cash will be directed to Israel, a sign of the kingdom’s increasing willingness to do business with the country, even though they have no diplomatic relations. This could help lay the groundwork for a breakthrough normalization pact between the two countries.

In an interview, Kushner said he viewed his investment plans as an extension of his work in the White House in advancing ties between Israel and its Arab neighbors, which have long refused to normalize relations with Israel until its leaders agreed to the creation of a Palestinian state.

“If we can get Israelis and Muslims in the region to do business together it will focus people on shared interests and shared values,” he said. “We kicked off historic regional change which needs to be reinforced and nurtured to achieve its potential.”

Kushner and his team declined to discuss which companies they are working with or how much cash is likely to be directed to Israel. He also declined to discuss his talks with Saudi Arabia’s Crown Prince Mohammed bin Salman, who oversees the Saudi investment fund’s strategic decisions.

A spokesman for Saudi Arabia’s $600 billion Public Investment Fund, whose board is chaired by Prince Mohammed and includes senior government ministers, declined to comment. The government’s media office didn’t respond to requests for comment.

Israel has been for years rumored to have behind-the-scenes ties with Saudi Arabia, but the Saudis have vehemently denied those rumors.

Former Prime Minister Benjamin Netanyahu and the Saudi Crown Prince reportedly held a secret meeting last November in which they discussed the possibility of normalizing relations between their two countries.

Subsequent reports said the Crown Prince pulled back from a normalization deal with Israel largely because of the US election result. Riyadh denied the meeting had even taken place.

Saudi Arabian officials have repeatedly said that a Palestinian state with eastern Jerusalem as its capital is a prerequisite for Saudi Arabia normalizing ties with Israel.