* Saudi Arabia fears losing Mubarak as ally to counter Iran
* Upheaval comes at tricky time for Saudi royal family
* Any US abandonment of Mubarak seen alarming Saudis
By Ulf Laessing
RIYADH, Feb 7 (Reuters) - Saudi Arabia is more concerned about losing allies to counter its regional adversary Iran than with the risk that upheavals sweeping Tunisia and Egypt might spread to the kingdom, diplomats and analysts say.
Flush with petrodollars, the world's top oil exporter can splash out to alleviate any social tensions due to unemployment -- around 10 percent of the Saudi work force is jobless -- and quell any unrest in the absolute monarchy, they say.
But some believe the Saudi rulers would be alarmed if the United States jettisons Egyptian President Hosni Mubarak, who, like successive Saudi monarchs, has been a longtime U.S. ally since taking power three decades ago.
"The Saudis...are worried that the U.S. has made a foreign policy mistake by appearing to give up support for Mubarak too easily," said Simon Henderson, a Washington-based Saudi watcher.
For the moment, Mubarak remains in place. Protesters who have paralysed Egypt and extracted concessions unimaginable two weeks ago -- among them a Mubarak pledge not run again for president in September elections and the sacking of his cabinet -- have yet to achieve their core demand that he go now.
Yet the Saudis may feel that a weakened Mubarak on his way out is no longer an effective bulwark against Shi'ite Iran. They more than share U.S. fears that Iran is seeking nuclear weapons -- a charge Tehran denies.
"Cut off the head of the snake," the Saudi ambassador to Washington, Adel al-Jubeir, quoted King Abdullah as advising U.S. General David Petraeus in April 2008, according to a U.S. cable released by WikiLeaks in November, referring to Iran.
The kingdom, custodian of Islam's holiest sites, sees itself as a bastion of Sunni Islam, so it is also deeply concerned about wider Shi'ite influence in the region having watched the 2003 U.S.-led invasion produce a Shi'ite-led government in Iraq.
The Saudis fret that the balance could tilt further if Mubarak's impending exit leads to prolonged uncertainty in Arab heavyweight Egypt, a staunch foe of Iran.
"There will be a vacuum. Egypt was a very important element for Middle Eastern stability. Saudi Arabia will have to carry the burden if there is instability or a vacuum on the political side," said Turad al-Amry, a Saudi political analyst.
"What is the direction of the new regime and new government (in Egypt) and how fast can it perform business?" he asked.
SPACE FOR RIVALS
Egypt, shaken by anti-Mubarak protests for the past 13 days, will in any case be too focused on its internal crisis to bolster Saudi efforts to counter Iran's sway, analysts say.
Diplomats said Riyadh also worries that a diplomatic void left by a preoccupied Egypt will give openings to countries such as Turkey and Qatar, a smaller Gulf rival of Saudi Arabia, which both seek bigger regional roles and are on good terms with Iran.
"Saudi influence will probably diminish, while others such as Qatar and Turkey who do not want an isolation of Iran like the Saudis will play a bigger role," said a Gulf-based diplomat.
Riyadh will be hard-pressed to find Arab allies to replace Egypt in a conservative Sunni axis wary of Iran, analysts say. Iraq and Syria already have strong ties with Tehran.
That might make Riyadh keener to ensure stability in Jordan, a Sunni monarchy also hit by street protests. "The Saudis could pump more money into Jordan," said U.S. analyst Barak Barfi.
Egypt's upheaval comes at an awkward time for the Saudi royal family. King Abdullah, is about 87 and went abroad for medical treatment in December. Crown Prince Sultan, his slightly younger brother, is also ailing. Another brother, Interior Minister Prince Nayef, is a possible candidate for future king.
Eventually the throne will have to pass to a new generation of Saudi princes. Although the king has set up a royal council to regulate succession, it is not clear how that will work.
All this makes it difficult for the ageing Saudi leadership to deal with any change in Egypt, diplomats say.
A week ago, King Abdullah became one of the few Arab leaders to voice open support for Mubarak. He also gave refuge in the kingdom to ousted Tunisian leader Zine al-Abidine Ben Ali.
The king's instinctive support for the embattled Egyptian leader revealed the extent to which Saudi foreign policy depends on long-tested personal ties. Sultan, Nayef and Foreign Minister Saud al-Faisal have also known Mubarak for decades.
For these stalwarts of a once-static Arab order, U.S. calls for Mubarak to cede "change now" awaken memories of American demands for reform in Iran before the shah was toppled in 1979.
"It is evident that the U.S. is abandoning Mubarak," said Hilal Khashan, political science professor at the American University of Beirut. "His regime has expired."
This was sending shock waves to Saudi Arabia, a strategic ally of the United States since 1945, he said.
"If the U.S. pushes for change in Egypt, nervous al-Saud royals will feel pressure coming their way very soon." (Additional reporting by Asma Alsharif in Jeddah and Alistair Lyon in Beirut; editing by Alistair Lyon and Paul Taylor)
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