Despite furore over Jerusalem move, Saudis seen on board with U.S. peace efforts

(Repeats Friday's story with no changes to text)

* Riyadh issued blunt condemnation of U.S. decision on Jerusalem

* In private, Riyadh pushing Trump peace plan, Arab officials say

* Saudis seen increasingly in line with Israelis to counter Iran

* Palestinians, Jordanians say they are sidelined by process

By Samia Nakhoul, Stephen Kalin and Suleiman Al-Khalidi

BEIRUT/RIYADH/AMMAN, Dec 8 (Reuters) - Saudi Arabia pulled no punches when it condemned President Donald Trump's move to recognise Jerusalem as the capital of Israel. But Palestinian officials say Riyadh has also been working for weeks behind the scenes to press them to support a nascent U.S. peace plan.

Trump reversed decades of U.S. policy on Wednesday with his announcement and instructions to begin the process of moving the embassy in Tel Aviv to Jerusalem, despite warnings that it would drive the wedge between Israel and the Palestinians deeper.

The Saudi royal court described the decision as "unjustified and irresponsible" and "a big step back in efforts to advance the peace process."

But Arab officials privately say that Riyadh appears to be on board with a broader U.S. strategy for an Israeli-Palestinian peace plan still in its early phases of development.

Four Palestinian officials, who spoke on condition they not be named, said Saudi Crown Prince Mohammed bin Salman and Palestinian President Mahmoud Abbas discussed in detail a grand bargain that Trump and Jared Kushner, the president's son-in-law and adviser, are expected to unveil in the first half of 2018.

One official said Prince Mohammed asked Abbas to show support for the U.S. administration's peace efforts when the two met in Riyadh in November.

Another Palestinian official said Prince Mohammed told Abbas: "Be patient, you will hear good news. This peace process will go ahead."

The U.S.-Saudi relationship has improved dramatically under Trump, partly because the leaders share a vision of confronting Riyadh's arch-rival Iran more aggressively in the region.

Kushner, 36, whose father knew Israeli leader Benjamin Netanyahu, has also nurtured strong personal ties with the 32-year-old crown prince as he asserts Saudi influence internationally and amasses power for himself at home.

The Saudi royal court did not respond to requests for comment. A White House official said Kushner did not ask the crown prince to talk to Abbas about the plan.

ULTIMATE DEAL

Palestinian officials fear, and many Arab officials suspect, that by closing the door on East Jerusalem as the future capital of a Palestinian state, Trump will align with Israel in offering the Palestinians limited self-government inside disconnected patches of the occupied West Bank, with no right of return for refugees displaced by the Arab-Israeli wars of 1948 and 1967.