‘Obstacles’ in Egypt’s $53 billion plan to rebuild Gaza, install Palestinian Authority control

Arab states led by Egypt have accepted a roadmap to rebuild Gaza as the “comprehensive Arab plan,” countering President Donald Trump’s proposal to redevelop the strip, transform Gaza into what he calls the “Riviera of the Middle East,” and displace Palestinians.

The White House has effectively rejected the Arab plan, saying “the current proposal does not address the reality that Gaza is currently uninhabitable and residents cannot humanely live in a territory covered in debris and unexploded ordnance,” National Security Council spokesman Brian Hughes said in a statement, standing by Donald Trump’s controversial proposal.

The Arab plan, seen by CNBC, says $53 billion is needed for reconstruction of the besieged strip, a number released last month by a joint UN-EU-World Bank report. The nearly 100-page plan, dubbed “Gaza 2030” included Egypt’s presidential logo and was reviewed by Arab states on Tuesday at an emergency summit in Cairo. It aims to sideline Hamas and proposes eventual Palestinian Authority control in the besieged strip. 

Arab states, in the summit’s final communique urged the international community and “international and regional financing institutions to quickly provide the necessary support for the plan.” The proposal does not indicate who will foot the bill specifically but could see European contribution as well as wealthier Gulf states like Saudi Arabia and Qatar.

The plan has come under fire for omitting key answers on issues like governance, the future of Hamas, and funding, and faces “some real obstacles to becoming reality,” Paul Musgrave, associate professor of government at the Georgetown University in Qatar, told CNBC’s Dan Murphy.

“It’s a wonderful document, but it’s also something that I’m not sure is really a serious plan, because it does dodge the two biggest questions. One, would Hamas ever agree to the political preconditions for making this grand vision a reality? Two, would the Israelis ever agree to allowing the kind of political settlement [of] a unified Palestinian Authority back in Gaza,” Musgrave added.

Israel has slammed the proposal and said before discussions progress on receiving aid or extending the ceasefire, Hamas must first release all remaining Israeli hostages from Gaza.

Israel’s Foreign Ministry spokesperson slammed the proposal and said it “fails to address the realities of the situation following October 7th, 2023, remaining rooted in outdated perspectives,” while voicing encouragement for President Trump’s plan.

The summit’s communique, meanwhile, also voiced support for “an international conference for early recovery reconstruction in the Gaza Strip,” which is scheduled for this month in Cairo, in cooperation with the UN.

Arab states also announced that they would work to establish “a trust fund” supervised by the World Bank, which aims to “receive financial pledges from all donor countries and financing institutions, for the purpose of implementing early recovery and reconstruction projects.”

In the most concise plan to date for rebuilding Gaza, the draft outlines a three-stage plan, culminating in 2030.

The first phase will last six months, and will cost $3 billion, during which rubble removal will take place in certain areas. Seven sites are projected to accommodate more than 1.5 million people with temporary housing, provided to the displaced during the reconstruction process.

The second phase, lasting two years at a cost of $20 billion will see housing units built for 1.6 million people, and the reestablishment of facilities, services and networks.

The third phase, lasting two and a half years at a cost of $30 billion will aim to continue the process “of establishing the necessary facilities, networks and service buildings,” while also building housing for another 1.2 million people. The hope is that these new units will have the capability to accommodate 3 million people.

The proposal does not include a future for militant group Hamas in the besieged strip, but outlines that an “administration will take over the management of the Gaza Strip’s affairs in a transitional phase for 6 months, an independent committee consisting of technocrats and non-factional figures, under the umbrella of the Palestinian government.” 

Arab states have stated the final goal is allowing the “Palestinian National Authority to fully return to the Gaza Strip.”

Arab states have called for “holding presidential and legislative elections in all Palestinian areas one year from now if the appropriate conditions are available.” In a statement to CNBC, a senior political official for Hamas said the group welcomed elections, saying it had been a demand for years, to give “the Palestinian people the chance to choose their representative leadership and their political pathway.”

Questions still remain around how or if Hamas will agree to disarm, but the group told CNBC the Arab plan contained “positive elements as well as a road map that is suitable to be a practical proposal.”