RIYADH, Sept 10 (Reuters) - Saudi Arabia said on Monday Israel was increasing tensions in the region and its future hinged on recognising Palestinian rights to statehood.

The unusually strong comments from the Muslim kingdom, which has traditionally close ties to Washington, come as the region awaits a U.S.-sponsored Middle East peace conference expected to take place in November.

"The cabinet reviewed the developments in the region and the Israeli practices that are increasing tensions and obstruct any serious effort to achieving peace and stability in the region," Information and Culture Minister Iyad Madani told the official SPA news agency after a cabinet meeting chaired by King Abdullah, without specifying details.

"The future of Israel hinges on its recognition of the rights of the Palestinian people to a state and to dignity."

Saudi Arabia has been trying to bolster its role as a Middle East peace broker. The regional heavyweight is expected to receive Palestinian President Mahmoud Abbas on Tuesday, Saudi sources say.

Abbas agreed with Israeli Prime Minister Ehud Olmert on Monday to create teams to tackle Palestinian statehood issues.

But Israel warned against expecting any rapid progress in the run-up to the U.S.-led conference tentatively planned for the second half of November in the Washington area.

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