* Top royal job changes can point to Saudi succession plans
* Prince Khaled was Saudi military chief in 1991 Gulf War
* Replaced by Prince Fahd, former head of Saudi navy
By Angus McDowall
RIYADH, April 20 Saudi Arabia's King Abdullah
has removed veteran deputy defence minister Prince Khaled bin
Sultan from his post, state media reported on Saturday, the
latest move in a reshuffle among princes holding government jobs
in the U.S.-allied kingdom.
Switches of important posts between princes are closely
watched because they indicate possible changes in the line of
succession in the monarchy, the dominant power among Gulf Arab
states and the world's biggest oil exporter.
Prince Khaled was head of the Saudi armed forces during the
1991 Gulf War but was passed over for the job of Defence
Minister in 2011 after the death of his father, Crown Prince
Sultan, who had held the position for five decades.
He has been replaced as deputy defence minister by Prince
Fahd bin Abdullah bin Mohammed bin Abdulrahman, Saudi Press
Agency (SPA) reported, citing a royal decree. Prince Fahd is a
former head of the Saudi navy.
SPA did not give a reason for the switch.
The Defence Minister is Crown Prince Salman, King Abdullah's
named successor. He oversees multi-billion-dollar arms purchases
that cement Saudi Arabia's alliances with Western nations.
Unlike in European monarchies, the Saudi ruling family
succession does not move from father to eldest son but along a
line of brothers born to the kingdom's founder, and is based on
seniority, experience, temperament and position in the family.
It is not clear who will rule after King Abdullah and Crown
Prince Salman, but the succession hopes of Prince Muqrin, the
youngest of the brothers, were boosted when he was appointed
second deputy prime minister earlier this year.
In the past year, grandsons have been appointed to senior
positions, including Prince Mohammed bin Nayef as Interior
Minister, Prince Saud bin Nayef as Eastern Province Governor and
Prince Khaled bin Bandar as Riyadh governor.
Speaking on Friday before a trip this month to the region by
U.S. Defense Secretary Chuck Hagel, Washington defence officials
said the United States was finalising a $10 billion arms deal
involving Saudi Arabia, the United Arab Emirates and Israel.
The deal involved the sale of V-22 Osprey aircraft, advanced
refuelling tankers and anti-air defence missiles to Israel and
25 F-16 Desert Falcon jets worth nearly $5 billion to the United
Arab Emirates, the officials said.
Saudi Arabia is expected to buy unspecified long-range
weapons that could be used on 84 Boeing F-15s that Saudi Arabia
is buying under a separate arms deal first announced in 2010.
Hagel's first trip to Middle East since taking office in
February included plans to visit Israel, Jordan, Saudi Arabia,
Egypt and the UAE, and he was expected to continue discussions
about the arms sale at stops along the way.
(Editing by William Maclean and Louise Ireland)