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Trump’s controversial statements on Gaza’s reconstruction; A Provocation for Arab states

US President Donald Trump’s controversial statements about the future of Gaza – such as his announcement to “clean out” Gaza or even consider a US takeover – and his request to displace the Palestinian population have sent shockwaves throughout the Arab world. In response, a number of regional powerhouses such as Egypt and Jordan firmly rejected such steps, while the influential Arab Gulf monarchies continue to advocate for a viable Palestinian state. At the beginning of February, Egypt, Jordan, Saudi Arabia, the Palestine Liberation Organization (PLO) and the United Arab Emirates (UAE) delivered a letter to US Secretary of State Marco Rubio in which they rejected Trump’s Gaza proposal as the deportation of Palestinians will “push the region towards more tension, conflict and instability.”

Trump’s provocative statements further drive a wedge between the Gulf and the US. While his transactional, deal-making style may align with Gulf ambitions for economic gain and regional influence – particularly if he delivers on promises to broker deals and secure investments – his unpredictability, his pro-Israeli position and his focus on neo-capitalist policies raise significant concerns, and could undermine potential partnerships.

Providing a plan for Gaza: The Arab Reaction on Trump

Against this backdrop, his statements put Arab leaders under additional pressure to provide an alternative plan for Gaza’s reconstruction. In recent months, multiple visions and ideas have been discussed but a concrete roadmap for a post-war scenario has been slow to materialise. Instead, regional players have repeatedly referred to traditional plans such as the Arab Peace Initiative (API), which was introduced by Saudi Arabia back in 2002. However, in response to Trump’s remarks, a number of regional leaders from Saudi Arabia, Egypt, Qatar, the United Arab Emirates (UAE), and Jordan met in Riyadh on February 21st to discuss next steps and find common ground for an Arab plan for Gaza’s reconstruction. Prior to this meeting, Egypt’s government under President Abd al-Fattah as-Sisi developed a plan including concrete ideas for Gaza’s reconstruction, a political transition, and future governance structures without displacing the Palestinian population. Such plan was discussed in Riyadh and also served as an entry point for discussion at the Arab League’s (AL) summit on March 4th in Cairo.

In the final summit declaration, all 22 members of the AL referred to the Egypt plan as the blueprint for Gaza’s reconstruction. They again reiterated their commitment to establish a Palestinian state based on the API and encouraged enhanced cooperation with international partners such as the UN, the US, and Europe to work on a peaceful solution. Furthermore, they warned that the displacement of Palestinians would further destabilize the fragile region and undermine security. In contrast to Trump’s plan, the AL’s proposal intends to allow the Palestinian population to stay inside Gaza in temporary housing units made of shipping containers during the reconstruction period as they could be hosted within three ‘safe zones’ during an initial early recovery period of six months. The plan further includes the installment of mobile houses and shelters in those safe zones as well as the influx of humanitarian aid to provide the local population with medical supply, food, and water. It was also said that regional and international private construction companies should be engaged in the reconstruction of destroyed infrastructure with total costs of USD 53 billion.

In terms of governance structures, the proposal envisages the creation of an independent Palestinian agency to co-ordinate and oversee the reconstruction. The envisioned agency would consist of Palestinian technocrats from all political factions. As part of the political transition, institutional reforms of the PLO are needed to improve Palestinian governance. However, the inclusion of Hamas was not explicitly mentioned and remains a contested topic for all Arab players. Furthermore, the plan also suggests to create a non-partisan Palestinian Community Support Committee to monitor and control the post-conflict reconstruction process which was already agreed upon by Palestinian factions during meetings in Cairo in late 2024. In this committee, neither members from Hamas nor from the Palestinian Authority (PA) should be included but local tribal leaders as well as technocrats and independent individual figures. In the first three months of the reconstruction phase, costs of about USD 3 billion are spent to clear rubble and unexploded ordnance, to move 1.2 million people into the temporary housing units and rehabilitate 60,000 destroyed houses. In the next phase, USD 20 billion are expected to be spent until 2027 to reconstruct permanent housing followed by a third phase aiming at constructing industrial zones, a fishing port, a seaport and an airport by 2030 with estimated costs of USD 30 billion. Here, the AL expects financial commitment by the World Bank, the International Monetary Fund (IMF) and other international partners to engage in reconstruction efforts and establish a dedicated trust fund.

Unpacking the Arab League’s Motives

For most Arab states, Trump’s statements regarding Gaza were not only considered as a provocation but also also as an eye-opener to work more consistently on a mutual approach and develop concrete ideas for the reconstruction of Gaza. Undoubtedly, this reaction is driven by three main motivations:

1. The regional players need to present themselves as firm and steady supporters of the Palestinian cause by promoting the perspective of a Two-State solution. In recent months, in particular Saudi Arabia has established itself as the forerunner of Palestinian statehood by establishing the Global Alliance for the Formation of the Two-States Solution together with other Arab and European partners. Such commitment and engagement are motivated by a sense of traditional responsibility, religious solidarity, and political pragmatism. Political legitimacy and credibility of Arab leaders such as Saudi Arabia’s Crown Prince Muhammad bin Salman also depends on close support for the Palestinians as he had taken a hard position on Israel blaming its military actions in Gaza as “genocide”.
2. Arab states have to preserve regional stability to preserve national security and economic development. As Gulf states are promoting economic diversification by investing in tourism, entertainment and other non-oil sectors, they position themselves as promising investment locations. Against this backdrop, further regional fragmentation, crisis escalation, and polarization seriously damage their business models. As a consequence, they need to find a modus operandi for conflict resolution to preserve national interests.
3. In light of Trump’s Gaza statements, the Arab states’ wait-and-see approach became too limited. Hence, an alternative plan for Gaza’s reconstruction needs to be considered as a bargaining chip towards Trump’s transactional approach by providing him an option to enter a deal including business agreements and closer economic cooperation.

In recent years and in light of its socioeconomic transformation, the Gulf states underwent a significant shift in their aid policies. The times of unconditional humanitarian assistance are over. In the Gaza case, Gulf states have provided significant aid to Gaza since October 7th, 2023, and before. For instance, the ‘Gaza Relief’ campaign initiated by Saudi King Salman Humanitarian Aid and Relief Center (KSrelief) raised around 26.7 million USD from more than two million individual donors to provide ambulances, water tanks and food for Gaza. Furthermore, in March 2024, KSrelief allocated USD 40 million to the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA). In total, KSrelief allocated USD 185 million in aid to Palestine through different UN agencies since the start of the war. In 2022, Saudi Arabia ranked as the eight-largest financial contributor to UNRWA and the largest from the Arab world with a total contribution of USD 27 million. In the last 25 years, Saudi Arabia has provided more in total than USD 7.27 billion to Palestine. By February 2025, the UAE has sent more than 37,000 tonnes of humanitarian aid to Gaza including medical and food supply as well as shelter tents. In 2024, Qatar sent more than 4,700 tons of diverse aid and 22 ambulance vehicles to Gaza.

However, most of the Gulf states are neither willing nor capable in terms of financial resources to shoulder the burden of reconstruction alone; “suitcase diplomacy” seems to be over as Gulf governments are focusing more on long-term investment and economic diversification. The Gulf states do not consider themselves as “ATM” anymore. In most of the Gulf states, governmental financial resources are increasingly being directed toward domestic infrastructure projects, technological advancements, and economic modernization initiatives rather than international investments. A substantial commitment to Gaza’s reconstruction would thus necessitate careful consideration of its potential impact on national economic objectives. Within this framework, humanitarian aid is increasingly viewed as a strategic instrument of economic statecraft and power projection by emphasizing returns on investment rather than purely altruistic motives.

The future for Gaza: Balancing national economic development with reconstruction efforts

Consequently, the Gulf states must balance its national ambitions for economic development with its geopolitical and humanitarian responsibilities, including solidarity with Palestine. Against this backdrop, Gulf states could frame the reconstruction of Gaza not only as a humanitarian duty but also as a driver for regional integration and economic development. By investing in Gaza as a Palestnian state, they could hit two birds with one stone as they are interested in both Palestinian economic resilience and national investment diversification. By aligning Gaza’s reconstruction with their efforts to project economic statecraft, the Gulf states could also present Trump their vision as a business opportunity from which he could benefit if he partners up with the Gulf states and accepts Palestinian statehood. Such a ‘Vision 2035’ for Palestine could thus link business interests with reconstruction, regional security, and governance management. As part of this humanitarian-investment nexus, Gulf states could provide more technical assistance in line with capacity development such as skills training, anti-corruption measures, knowledge transfer, experts exchange, and people-to-people contacts together with other Arab states, US and Europe in order to develop an efficient and functioning Palestinian administration as well as an economic vision.

Despite growing tensions between Trump and the Gulf states, all of them are in dire need of good relations with the US in order to preserve regional stability and economic interests. Here in particular, Saudi Arabia retains high strategic advantage in negotiations with Trump over the potential normalisation of relations with Israel. Trump still considers Saudi-Israeli normalization as a “huge priority” which also featured prominently on his agenda during his first term. However, since the start of the Gaza war, normalization talks remain on ice as Saudi Arabia promotes a two-state solution. Saudi Arabia thus finds itself in a more flexible position as it can portray itself as a strong supporter of Palestine but can use potential normalization as a bargaining chip towards the US. As such, the price for normalisation has increased, and the creation of a Palestinian state will remain a central demand for Saudi Arabia.

Against this backdrop, the kingdom needs to carefully balance its ambition to advocate for a Two-State Solution while keeping the option of a deal with the US and Israel on the table. Here, it needs to prevent a scenario in which any transactional agreement with Israel and Trump at the expense of the Palestinians would result in significant reputational damage. Hence, Saudi Arabia could aim to convince Trump that his ideas on Gaza would cause unpredictable risks for regional stability and thus undermine the president’s economic interest and business partnership with Arab partners such as Saudi Arabia. For instance, Saudi Arabia could promote its vision for a stable region in partnership with Trump as both are interested in investments and economic development. By hosting US and Russian delegations on the Ukraine war, the kingdom still plays a prominent role in Trump’s foreign policy agenda and could capitalize on such leverage regarding Gaza by providing ‘good services’.

Challenges Ahead: A Balancing Act for the Gulf States

However, significant challenges remain.

• A lack of tangible Palestinian partners: The political future of Palestinian self-administration remains highly uncertain, particularly given the longstanding divisions between Hamas and Fatah. In times of political uncertainties within the Palestinian fractions, reconstruction efforts are at risk as they could be undermined by clashes between Hamas and the PA or new Israeli military actions against Hamas. Saudi Arabia’s financial engagement has historically been aligned with the PA, which governs the West Bank, rather than Hamas, which controls Gaza, and was supported by Qatar in the past. The rift between Hamas that has managed to remain a powerful actor in Gaza despite the Israeli military campaign since October 7th, 2023, and the PA is likely to hamper any post-war political transition. The absence of a unified and stable Palestinian governance structure raises concerns about the efficacy and long-term sustainability of reconstruction efforts. Additionally, Gulf trust in Fatah and the PA has eroded in recent years due to corruption, mismanagement, and dysfunctionality. Against this backdrop, Gulf states, in particular Saudi Arabia, demand comprehensive reforms of the PA to reestablish trust and credibility.

• Diverging views on Hamas: So far, the Gulf states could not agree on a unified position on Hamas which will create serious obstacles for any realistic post-war scenario. The Cairo plan does not provide a clear roadmap on how to deal with Hamas or specify who would be responsible for disarming the Islamist group. As of today, Hamas refused to accept its demilitarization. Whereas Egypt and Saudi Arabia consider a future involvement of Hamas into the Palestinian power structure rather skeptical but do not completely oppose it, the UAE is strictly rejecting any future role of the Islamists. Qatar, in turn, enjoys the closest ties to Hamas and thus also take a more conciliatory position. Despite such differences, all Gulf states regard the close alliance between Hamas and Iran as a significant security risk, leading to limited interest in allowing Hamas to assume an influential political role in Palestine in a post-conflict scenario. In general, public support for Hamas is low in all Gulf states: In a survey between November and December 2023, 61% of the UAE respondents considered the Hamas either as “very negative” or “somewhat negative” followed by Saudi Arabia with 58%, Bahrain with 51%, Kuwait with 46%, and Qatar with 37%. Nevertheless, any Hamas involvement in a future Palestinian governance structure would be rejected by the Netanyahu government and the US. Such a scenario would thus hamper concrete reconstruction efforts and long-term political stability. As a direct response to the AL summit, Israel dismissed the Arab proposal due to the potential involvement of Hamas.
• The Netanyahu factor: Among all Gulf states, Israel’s Prime Minister Benjamin Netanyahu is considered as an unreliable player who is not willing to take any pragmatic solutions into consideration. He further aims to prevent a credible roadmap to the establishment of a Palestinian state and is thus not accepted by the Gulf states as a potential partner for long-term stability. Across parts of Gulf societies – particularly in Saudi Arabia – an anti-Netanyahu media campaign has been launched after he referred to Saudi Arabia as a potential home for Palestinians.
• The uncertain Arab role in Gaza’s security: During the AL summit, it was agreed to support a UN peacekeeping mission and that Jordan and Egypt could train Palestinian police and security forces. So far, however, no Arab state has announced concrete commitment to send security forces to Gaza. In principle, the UAE has shown its willingness to deploy troops on the ground as part of a peacekeeping mission, but such military engagement poses high reputational and security risks and can only be successful on a multilateral and collaborative level.

In Need for a Unified Position: Practicability, pragmatism, and feasibility

Trump’s Gaza statements exert more pressure on the Arab states to find a unified position on the future of Palestine including concrete steps for reconstruction and political transition. Against this backdrop, the AL summit aims to send a message to Trump, Israel and the Palestinians. The summit provided a forum to restate joint Arab opposition and reaffirm regional support for Palestinian statehood. Furthermore, Arab leaders have become aware of the necessity to create a unified position which is not only based on pro-Palestinian rhetoric but mutual action. Otherwise, a worst-case scenario of Israeli occupation and Palestinian displacement approved by Trump could become more likely which would undermine the abovementioned three main Arab motivations.

In this regard, the current “two-state mantra” needs to be complemented with an action plan that is based on practicability, pragmatism, and feasibility including short-term measures related to the financing and management of humanitarian aid, the establishment of an accountable governance structure and the preservation of national and regional security. In this regard, the pressure on the Arab community to show real action rather than only diplomatic support and ‘lip-service’ has tremendously increased and can create a new dynamic. Consequently, the Trump statement poses significant risks for the Palestinians and the region but also provides a historical momentum for the Arab states to show real commitment for the Palestinian cause including a regional response for a regional challenge.

In finding a unified position and presenting a joint vision for Gaza, the Arab world could promote pro-active regional ownership in times of growing multipolarity, ensuring that both vested and Palestinian interests receive sufficient priority from international partners. As Trump cannot be considered a reliable and predictable partner, Arab governments need to independently craft a credible alternative for Gaza’s reconstruction, as well as a compelling narrative for why Trump should support it. Nevertheless, persistent and difficult challenges remain, such as the future of Hamas, the burden sharing of reconstruction costs, the potential need to send peacekeeping troops to Gaza, and the unlikeness of Netanyahu to support any pragmatic solution for peace.