RIYADH (Reuters) - Saudi Arabia's King Abdullah hosts George W. Bush at his desert playground on Tuesday when the U.S. president will get a taste of how the royals live in the world's richest oil-producing monarchy. Setting aside serious talk of Middle East peace, Iranian challenges and controversial arms deals that dominated day one of his visit, Bush will trade in his business suit for more casual attire and stay the night at the sprawling tent-like structure with walls made of silk. Even the Arabian stallions the king raises at his Al Janadriyah "horse farm" near Riyadh lead lives of luxury. They are kept in climate-controlled, air-conditioned stables and are treated to aqua-therapy. The special hospitality is for a U.S. president who hosted Abdullah as crown prince in Crawford, Texas, in 2002 and 2005. When Bush walked arm-in-arm with Abdullah at his ranch nearly three years ago, oil cost $54 a barrel, a level the Saudi government admitted then was "clearly too high." Oil is now hovering near $100 a barrel and many Americans are griping about their tax dollars helping to underwrite the defense of wealthy Gulf allies, so the issue may come up again. SAUDIS' REASON TO BE PLEASED Bush will spend Tuesday sightseeing, meeting Saudi entrepreneurs and visiting with U.S. embassy staff, and he has already given his royal host good reason to be pleased. Trying to counter Iran's growing military clout in the region, Bush made clear on Monday his commitment to go ahead with a major arms sale to Saudi Arabia. Just hours after his arrival in Riyadh, the U.S. administration said it notified Congress of its intention to offer the Saudis a package of advanced weaponry as part of a multibillion-dollar deal with Gulf Arab allies. The deal, covering 900 precision-guided bomb kits worth about $120 million, has raised concerns in Israel and its U.S. supporters about the military balance of power in the region. The sale is part of Bush's effort to persuade Saudi Arabia to help contain Iran, a strident U.S. foe. Bush also wants Saudi Arabia to cajole other Arab states into bolstering the Israeli-Palestinian peace process that he hopes, in the face of deep skepticism, will yield a final deal before he leaves office in January 2009. Mindful of Saudi Arabia's strategic importance, Bush has avoided direct criticism of its human rights record during his trip. His last stop will be Egypt on Wednesday before heading home to Washington. Abdullah is viewed by many Saudis as a supporter of modest reform including letting women drive. Diplomats say his room for maneuver is limited by clerics and senior royalty. The Saudi government has been a close U.S. ally since the 1950s although relations hit a low after the September 11 attacks of 2001 when 15 Saudis were among 19 suicide-plane hijackers. The Bush administration has praised the Saudis for battling al Qaeda-inspired insurgents, though some democracy activists say the security crackdown has been used as an excuse to smother a nascent reform movement.