Saudi Arabia will terminate a $4 billion deal directed at equipping and supporting Lebanese security forces as retribution for siding with Iran during the dispute with the two populous nations, the Saudi Press Agency announced on Friday.
The Lebanese government “deeply regretted” the Saudi decision, said Lebanese PM Tammam Salam.
"We did not want the matter to reach what contradicts that nature of historic relations between Lebanon and the country of the two shrines [Saudi Arabia], we are keen on keeping the relations brotherly and friendly." a statement released by Lebanese Prime Minister Tammam Salam's office said.
The pledge included a $3 billion deal to buy French arms for the Lebanese military over four years and a $1 billion support deal for the Lebanese police, where the country has already received anti-tank guided Milan missiles last year.
Lebanese Foreign Minister Gebran Bassil had rejected to support Saudi resolutions against Iran in a meeting between foreign ministers of the east, which lead to the announcement of the decision.
Saudi-Iran relations took a dive in January, when Saudi Arabia executed 47 people, including prominent Shia cleric for suspected acts of terrorism. Protesters stormed Saudi diplomats in Iran and Riyadh cut diplomatic relations with Tehran.
Lebanon's "non-condemnation of the blatant attacks against the Saudi Embassy in Tehran and its Consulate-General in Mashhad” is the reason Saudi Arabis halted the deal, a Saudi news agency statement said.
The Lebanese decision is "inconsistent with the fraternal relations between the two countries and they are not taking into account their interests," the report said.
American support for the Lebanese military was reiterated by the US State Department spokesman Mark Toner, speaking to reporters in Washington after the Saudi announcement.
"We're going to continue our support to the Lebanese armed forces and security services,” Toner said.
The Lebanese army is seen as a unifying force in Lebanon and draws its ranks from all of the country’s people.
Historically, the Lebanese army has been equipped by the US and France, the Saudi pledge by the late King Abdullah was described as the largest-ever single grant to the Lebanese armed forces.
Another factor since that time is the dramatic drop in world crude oil prices which was once over $100 a barrel, crude oil now sells at around $30, putting strain on Saudi Arabia's economy.
Ratings agency Standard & Poor's recently downgraded the kingdom's credit rating to "A minus/A-2" from "A plus/A-1," citing the slump in oil prices.