The Islamic State, like Al Qaeda, is considered a top security threat by the Saudi regime. The Islamic State has declared Saudi Arabia its enemy; its propaganda superimposes its black flag over images of Mecca. Islamic State terrorists have attacked Shia mosques and security officials in the kingdom, and have implored citizens to assassinate senior Saudi leaders. More broadly, the Islamic State threatens the regime’s legitimacy, claiming that it alone embodies statehood under God’s law. It has called the royal family “slaves of the Crusaders and allies of the Jews” and derided them for abandoning Muslims around the world.

Riyadh has taken steps to stifle the flow of Islamic State–bound Saudis. It has arrested more than 1,600 suspected Islamic State supporters and reportedly foiled several attacks. U.S. Treasury officials have declared the Saudis see “eye to eye” with the United States in stopping Islamic State fundraising, and the kingdom has stepped up its monitoring of social media. Senior religious officials with close ties to the royal family have also denounced the Islamic State (and Al Qaeda). The kingdom announced it was forming an “Islamic” military alliance, headquartered in Saudi Arabia, to fight terrorism.

The kingdom has grown far more effective in stopping terrorist financing. Al Qaeda long drew on Saudi financiers, and Riyadh’s initial response was lackluster. Part of the problem was that Saudi Arabia does not have an elaborate taxation system, so the government often lacks knowledge of how much money its citizens have or how they spend it. The kingdom invested heavily in fighting terrorist financing, with considerable U.S. help. As a result, it is far more difficult to send money to terrorist groups from Saudi Arabia. In 2014, money going to fighters in Syria was often channeled via Kuwait to avoid Saudi countermeasures. Despite these aggressive measures, financial support for Sunni extremist groups from Saudis remains a significant problem. As former senior CIA official Bruce Riedel contends, “Saudi sources remain major funders of groups like the Afghan Taliban and Lashkar-e-Taiba in Pakistan. Some accounts suggest significant Saudi money has gone to Al Qaeda’s affiliate in Syria, the al-Nusra Front.” Clearly, there is room for improvement.

Saudi Arabia has also initiated a well-funded terrorist rehabilitation program, which gives former radicals a chance to reintegrate into society. Religious leaders are involved to dissuade participants from extremist views. Participants receive a job and family support. Some of those who have gone through the program, however, have relapsed, including several important members of AQAP. But it’s a step in the right direction.

AVENUES FOR progress have more to do with broader issues of Saudi politics than with day-to-day operations. Although Riyadh opposes the Islamic State, it finds the Syrian regime, with its close ties to Iran, far more menacing. Despite the kingdom’s efforts to reduce the flow of fighters abroad, Saudis find it too easy to join the ranks of the Islamic State—they comprise an unsettling proportion of foreign fighters.

More importantly, Saudi Arabia is home to numerous preachers and religious organizations that embrace sectarianism and oppose a U.S. role in the Middle East. Certain prominent Saudi preachers regularly condemn Shia Muslims, thus validating the Islamic State’s sectarian campaign. The situation is not all bleak. Many senior religious leaders do urge Saudis to refrain from enlisting in conflicts abroad, arguing instead that local Muslims or state authorities should be the ones to respond.

The Saudi rivalry with Iran further polarizes the region. By portraying Iran as the source of all the region’s problems, the kingdom’s preachers legitimate those who fight it, including the jihadists whose strident anti-Shia words and deeds are leading to the deaths of thousands. To shore up its position, Iran has reached out to Shia militias in Afghanistan and Iraq and Lebanese Hezbollah. Iran and Saudi Arabia appear trapped, with each employing local proxies to undermine the other, escalating mutual suspicious and paranoia along the way.

Saudi Arabia considers Al Qaeda to be a mortal enemy, yet its military campaign in Yemen, conducted with significant support from the UAE, has indirectly empowered the group. By targeting the Houthis, which Riyadh considers to be a pawn of Tehran, Saudi Arabia has given breathing space to AQAP. Recently, however, Saudi Arabia and the UAE have reprioritized AQAP, forcing the Al Qaeda affiliate into retreat.

When Saudi Arabia launched its war in Yemen, it did so without coordinating security services or otherwise bringing the full power of the kingdom to bear. Despite repelling the Houthis, Riyadh has not ended their dominance, killing thousands of civilians and expending billions of dollars in the process. The kingdom pursued the war despite Obama administration criticism over civilian deaths, but its forces remain dependent on Washington for intelligence and logistics.

SAUDI ARABIA’S relationship with terrorists is far more opaque than Iran’s. While Tehran’s support for terrorism is open, extensive and state-sponsored, nonstate actors play the dominant role in Saudi Arabia. Yet being “nonstate” does not absolve the Saudi government of responsibility. These actors enjoy a range of connections to the Saudi regime. Some receive official patronage. Others, particularly those tied to leading clerics in the kingdom, are embraced indirectly by the regime’s self-proclaimed role as “defender of the faithful.” And still others are truly private, acting independently of the government and, at times, in opposition to it.

In addition, the Saudi royal family itself occupies an unusual role. In one sense, the royal family, with its tens of thousands of princes, is not the government. However, the family’s and the government’s finances are interwoven, and if a prince supports a group it has an unofficial imprimatur of approval. King Salman himself, for example, helped raise money for the mujahideen in Afghanistan and the Balkans.

Many of these voices are responsible for indoctrination rather than direct violence—propagating views on the Satanic nature of Jews, the apostasy of Shia, the heretical nature of the Ahmadiyyas and the legitimacy of using violence to repel foreign occupiers from Muslim lands, be they Indian forces in Kashmir, U.S. forces in Iraq or Israeli forces in historic Palestine. Such support, in the United States, would often be considered distasteful, but part of protected free speech. For terrorists, however, it can prove invaluable as it provides theological legitimacy for their actions, enabling them to attract recruits and funds. Although the kingdom suppresses free speech related to calls for political reform or better relations between Shia and Sunnis on a regular basis, hateful and dangerous teachings are allowed to flourish.

Saudi counterterrorism policy represents a mix of ideology, domestic politics and cold pragmatism. Most Saudis, including many in the government, are strong supporters of an austere version of Salafism, regard non-Muslims (and most non-Salafis) as hostile, and consider fighting Israel, India and, at times, even the United States as fair game. Spreading “true” Islam with missionary zeal is particularly popular.

For the royal family, this general domestic support is mixed with a need for legitimacy. The royal family is not elected, and its social-services and economic-growth records are mixed. The collapse of the price of oil has exposed alarming vulnerabilities: the kingdom’s budget deficit today is the largest in its history. As such, the royal family relies heavily on its pact with the clerical establishment to implement Islamic law and to defend the faith in general. Rejecting missionary work and religious education is, therefore, untenable; even rejecting violence in the name of the faith is challenging if the cause is popular, as is the anti-Assad struggle in Syria today. King Salman, if anything, has moved closer to the clerical establishment since he took power in 2015. He fired the only female cabinet minister and is in regular contact with leading conservative clerics.

But the Saudi royal family is also pragmatic. It values its relationship with the United States, and the 2003 attacks taught it that faraway problems can find their way home quickly and unexpectedly. So the time-honored practice of diversion—convincing radicals to go after other targets—is risky. The regime is particularly sensitive to anything that might call into question its legitimacy, and has not hesitated to silence or imprison popular clerics when necessary.

Complicating these generalizations, the kingdom is now in the midst of a profound change. King Salman is the last of his generation: all future Saudi leaders (and the vast majority of Saudis) will have grown up in a country that has known considerable wealth. In the past two years the kingdom, which historically preferred to act behind the scenes, has already charted an increasingly independent and assertive path. Salman has shaken up succession, gone to war in Yemen against initial U.S. opposition, openly criticized the Obama administration on the Iran deal, stepped up action in Syria and is playing a far more active role in the region than is typical. On counterterrorism, the appointment of Mohammed bin Nayef as crown prince is at least promising, as he is pro-American and an aggressive and effective foe of Al Qaeda and other groups. Yet it is Mohammed bin Salman—technically the deputy crown prince, but the son of the king and his preferred heir apparent—who is clearly calling many of the shots. They appear to be trying to sideline Prince Mohammed bin Nayef.