In a statement read out on state television on Tuesday, King Abdullah said, "If the option of peace fails as a result of Israeli arrogance, then the only option remaining will be war, and God alone knows what the region would witness in a conflict that would spare no one."
The king appealed to the world to stop Israeli attacks on Lebanon, and also pledged to donate over $1.5 billion to the country, according to the statement by the royal court.
The king has assigned $500 million for the reconstruction of Lebanon, and $1 billion to be deposited in Lebanon's central bank to support the economy.
He said that the Saudi government had been trying to bring a halt to the violence since it began on July 12.
"It must be said that patience can't last forever, and if the brutal Israeli military continues to kill and destroy, no one can foresee what may happen."
Saudi Arabia, Egypt, Jordan and Kuwait have rebuked Hezbollah for the fighting in Lebanon and the Saudis have described the kidnapping of the two Israeli soldiers as an "uncalculated adventure".
Abdullah's statement comes a day before the kingdom takes part in an international conference on the crisis in Rome.
Abdul-Illah al-Khatib, the Jordanian foreign minister has said that Arab delegates will push for an immediate ceasefire and the Lebanese government's assertion of its authority over southern Lebanon.