Saudi Arabia demanded on Thursday that the U.S. State Department retract a claim that King Abdullah met Israel's president last year, in a rare public rebuke toward the kingdom's veteran ally.

William Burns, undersecretary at the State Department, told a conference on U.S.-Saudi relations in Washington this week that the king spoke with Israel's President Shimon Peres at a United Nations conference on dialogue among world religions in New York in November.

Both Peres and King Abdullah attended the UN interfaith meeting and gave speeches, but in public they were not seen talking to each other.

"The comments by the State Department undersecretary are absolutely baseless and made up," a statement from an "official source" on the state news agency SPA said.

"The official source demanded that the State Department retract the news and offer an explanation and clarification of the reasons behind this falsehood that does not serve relations between the two friendly countries."

There are no diplomatic ties between Israel and Saudi Arabia, which is the main backer of an Arab proposal for an Arab-Israeli peace deal that would see all Arab states establish formal relations if Israel returns lands taken in 1967.

Riyadh has resisted U.S. pressure to establish public channels with Israel before any final peace, but there have been numerous reports in recent years of secret meetings between senior members of the Saudi royal family and Israeli officials.

Riyadh has denied the reports, which could damage its credibility among many Arabs and Muslims who say Saudi Arabia, home to Islam's holiest sites, is too close to Washington.

Islamist network al-Qaida launched a campaign to topple the Saudi rulers in 2003 and Riyadh fears militants could use its poor southern neighbor Yemen to revive the insurgency.