The United States put Saudi Arabia on a watch list in 2004, warning that it could enforce sanctions if the kingdom did not extend religious freedoms.

It is the first time a country blacklisted under a 1998 law targeting nations that violate religious rights has not been punished.

After listing the country in 2004 the US state department avoided immediate action with a waiver and said it was working with the Saudis on issues such as deleting insults about Jews in school textbooks.

By law the Bush administration had to decide whether to extend the waiver or take sanctions against its ally.

Saudi opposition and rights groups have questioned how far Saudi Arabia has improved religious freedom, especially in cleaning up its textbooks.

Sean McCormack, the state department spokesman, said the state department told the US congress that it decided to leave the waiver in place due to Saudi co-operation in promoting more tolerance and creating a rights commission to review complaints.
  
In 2004, the state department said religious freedom did not exist in Saudi Arabia.

Saudi Arabia has no legal protection for freedom of religion and the law requires that all citizens be Muslims. The public practice of all other religions is illegal.