Wall Street's top financiers struck a pessimistic tone about the global economy at a flagship gathering in Saudi Arabia aimed at deal brokering, as a violent conflict between Israel and Hamas that has killed thousands of people unfolds.

The annual event is typically used by attendees as an opportunity to build relationships with some of Saudi Arabia's biggest companies and its $778-billion sovereign wealth fund, drawn by the promise of deals as the kingdom embarks on an ambitious reform plan to wean its economy off oil.

But an escalation between Islamist group Hamas and Israel into a broader conflict overshadowed the event dubbed "Davos in the Desert", a nod to the annual gathering of world leaders and corporate bosses in the Swiss Alps.

Geopolitical tensions heightened by West Asia conflict pose the biggest threat to the world economy, World Bank president Ajay Banga said.

"There is so much going on in the world and geopolitics in the wars that you're seeing and what just happened recently in Israel and Gaza. At the end of the day, when you put all this together, I think the impact on economic development is even more serious," Banga said.

Although the globe's top financiers dwelt little on the conflict, speaking about topics such as artificial intelligence, the economic fallout of war combined with record debts as rates rise created a bleak backdrop.

"There’s no question if these things are not resolved, it probably means more global terrorism, which means more insecurity, which means society is going to be fearful ... and ... we see contractions in our economies," BlackRock chairman and CEO Laurence Fink said.

Fink was flanked on a panel at the Future Investment Initiative (FII) conference by bank CEOs including Goldman Sachs' David Solomon, JPMorgan's Jamie Dimon and Citi's Jane Fraser. They spoke about topics including women in the workplace but also the implications of rising interest rates.

Ray Dalio, founder of hedge fund Bridgewater Associates, said he was pessimistic.

"If you take the time horizon, the monetary policies that we’re going to see and so on will have greater effects on the world," Dalio said. "And you look at the world gaps, so it’s difficult to be optimistic on that."

HSBC Group CEO Noel Quinn also warned of the perils of heavy government debts. "I’m concerned about a tipping point on fiscal deficits," he said. "When it comes, it will come fast and I think there are a number of economies in the world where there could be a tipping point and it will hit hard."

'Unrelenting' The remarks come as Israel's military said it was preparing for "unrelenting attacks" to dismantle Hamas. Former US President Barack Obama warned that "any Israeli military strategy that ignores the human costs could ultimately backfire".

The conflict could upset the stability of West Asia just as regional powerhouse Saudi Arabia pours hundreds of billions of dollars into a vast economic transformation plan.