Qatar is unlikely to agree to demands from a coalition led by Saudi Arabia that includes shutting down Al-Jazeera, former U.S. diplomat Theodore Kattouf told CNBC on Wednesday.
The seven-member coalition has also demanded that Qatar close a Turkish base and downgrade its relations with Iran. The deadline, which had been extended, expired Wednesday, according to The Associated Press.
"You have to ask what the next step is" for Qatar's leader, said Kattouf, former U.S. ambassador to Syria and the United Arab Emirates.
"Asking him to close a base where Turkish troops are stationed, downgrade relations with Iran and close Al-Jazeera, the flagship satellite channel in the Middle East, would be humiliating," Kattouf said on "Squawk Box."
"So there's no way out of this immediately."
The coalition, which includes Egypt, Bahrain and the oil-rich United Arab Emirates, cut diplomatic ties with Qatar three weeks ago, accusing it of supporting terrorism.
"They're like kids in a tough neighborhood who have too much lunch change in their pocket," said Kattouf, president of Amideast, which works to foster Americans' understanding of the Middle East.
Regardless of whether or not Qatar closes Al-Jazeera, Saudi Arabia is doing what it can to make sure its citizens are shielded from the news network: It plans to fine people caught watching Al-Jazeera 10,000 riyals ($2,667), according to the Saudi commission for tourism and national heritage.
Ratings agency Moody's has cut Qatar's sovereign credit rating from stable to negative because of the standoff. Kattouf said the dispute is unlikely to affect the American economy barring further developments.
"The United States is committed to keeping shipping lanes in that region of the world open, so I don't see any move to close Qatar's ports to oil shipments or gas shipments in or out," he said.
Kattouf said there's one area where Qatar could move to ease the dispute — its support of the Muslim Brotherhood, which had held power in Egypt.
"The area where Qatar could please the U.S. and ease some of the pressure is to quit supporting Islamist terrorist groups," he said. "But the Gulf countries consider the Muslim Brotherhood a terrorist group, the United States has not labeled the Muslim Brotherhood a terrorist group thus far."
-- CNBC's Abid Ali and Dan Murphy contributed to this report.
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