President George Bush was last night working to persuade Saudi Arabia to maintain its support for a revived, but fragile, Israeli-Palestinian peace process and to confront Iran across the Middle East.

Arriving in Riyadh on the penultimate stage of his regional tour, Bush went into talks with King Abdullah as the administration prepared to notify Congress of a $20bn (£10.2bn) arms package for the Saudis - satellite-guided weaponry and other high-tech munitions - highlighting the oil-rich kingdom's privileged relationship with Washington.

As on his previous stops in the Gulf, the president was given a red carpet welcome, but no public engagements are planned in a country where a recent poll found that his popularity rating was just 12% - less than that of Iran's president, Mahmoud Ahmadinejad, or the al-Qaida leader and renegade Saudi, Osama bin Laden.

US officials say Saudi support is crucial as the Israeli-Palestinian talks re-launched at the Annapolis summit last November get under way, with the hugely ambitious target of a peace treaty by this time next year. But King Abdullah is unwilling to do anything that could be interpreted as the "normalisation" of relations with Israel, without seeing substantial progress towards a peace agreement.

Talks on the most sensitive "core" issues - borders, Jerusalem and refugees - were held yesterday between Tzipi Livni, Israel's foreign minister, and Ahmed Qureia, the chief Palestinian negotiator, in line with the Annapolis timetable and Bush's visit to Israel and the West Bank last week. But Livni and Qureia agreed only to continue talks in private. "When negotiations are conducted [in front of] the cameras, this results in the adoption of more extreme positions, the distortion of what is said in the negotiating room, the raising of expectations, followed by disappointment and violence," Livni said.

Separately, Ehud Olmert, Israel's prime minister, told the Knesset foreign affairs and defence committee: "I am not sure we can reach an agreement and I am not sure we can reach implementation, but I would be betraying my job and the state of Israel if I didn't give it a chance."

Oil and weapons supplies are both crucial elements of the US-Saudi relationship. But the kingdom's political clout, and its Arab and Muslim legitimacy, are as important as its financial reach: thus the effort made to persuade its foreign minister to go to Annapolis. Riyadh also brokered a key deal between the PLO and the Islamists of Hamas last year, only to see it collapse when Hamas took over the Gaza Strip.

The Saudis have consistently demanded that Israel halt all settlement activity as a sign of its seriousness about peace. Olmert makes a distinction between "illegal outposts" and other larger settlement blocs, which he hopes to keep under a peace deal.

Bush's talks in Riyadh were also expected to deal with Iranian policy in the region, including Tehran's nuclear ambitions and its support for radical groups such as Hamas, Hizbullah in Lebanon, and Shia militias in Iraq. Iran was the main focus of the president's keynote speech of his trip in Abu Dhabi on Sunday.

Stephen Hadley, Bush's national security adviser, said democracy and human rights in the Arab world were also being raised in every meeting. "I think they would say they are pursuing the freedom agenda," he said of Bush's Arab interlocutors. "Obviously they have different political systems from us, different history, different cultural context. But these folks ... are on board with the freedom agenda and they are pursuing it in their own fashion."

Battle of bedtime

Visiting seven countries in as many days is taking its toll on an American president who famously likes to be tucked up in bed by 9.30pm but finds that Arab leaders - used to escaping the searing heat of the day - like to do business into the small hours. In what correspondents are calling "the battle of the bedtime," Bush was forced to eat a formal dinner at a Saudi palace around the time he is normally getting into his pyjamas. Briefing aboard Air Force One suggested this may be the latest meeting the president had ever had. "This is a matter of great sensitivity," a Bush administration official said with a smile. Bush's late night was at an encampment where Abu Dhabi's crown prince, Sheik Mohammed Bin Zayed Al Nahyan, raises horses and prize falcons.