The Saudi club announced it has dismissed the Frenchman, who suffered a home defeat against Cristiano Ronaldo's Al Nassr in the last round of the Saudi Pro League.
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Former France and PSG coach Blanc arrived in July 2024 and led the team to victory in the King's Cup last May, defeating Al Qadisiah in the final.
After four matchdays of the 2024/25 championship, Al Ittihad is third on the table with three wins and one defeat, three points behind first-place Al Nassr.
While waiting for a replacement to be found, Al Ittihad have promoted Hassan Khalifah as interim manager.