Israel can be Saudi Arabia's 'potential ally', Mohammed bin Salman says
The de facto leader, 36, also called the killing of journalist Jamal Khashoggi "a huge mistake" for which he was unfairly blamed.
"For us, we hope that the conflict between the Israelis and Palestinians is solved," the prince told The Atlantic, according to a transcript issued by the official Saudi Press Agency.
"We don't look at Israel as an enemy, we look to them as a potential ally, with many interests that we can pursue together... But we have to solve some issues before we get to that."
Saudi Arabia does not have diplomatic relations with Israel, but in 2020 Gulf allies Bahrain and the United Arab Emirates normalised ties with the Jewish state.
The controversial normalisation deals under the US-brokered Abraham Accords angered the Palestinians, who condemned them as a "stab in the back".
Saudi relations with Israel's arch-foe Iran, blamed by Gulf states for creating chaos in the region, have at the same time showed signs of improvement with several rounds of talks hosted by Iraq.
"They are neighbours. Neighbours forever. We cannot get rid of them, and they can't get rid of us," the prince said of Iran.
"So it's better for both of us to work it out and to look for ways in which we can coexist," the transcript said he told the US monthly publication.
"Hopefully, we can reach a position that's good for both countries and is going to create a brighter future for this country and Iran," he added.
Saudi Arabia has repeatedly said it would stick to the decades-old Arab League position of not establishing official ties with Israel until the conflict with the Palestinians is resolved.
Prince Mohammed has, however, seemed more open than his father, King Salman, towards Israel, allowing its commercial aircraft to pass through Saudi air space.